Bankrupt General Motors Corp. has found a buyer for Saab, unloading the last major piece of the shrinking automaker's empire that had been on the block.
The brand will be bought by Swedish carmaker Koenigsegg Group, known for making $1.2-million super-cars that can top 240 mph.
A price was not disclosed, although GM said the acquisition would be bolstered by $600 million in financing from the European Investment Bank, backed by the government of Sweden. GM said it would provide additional support to help Koenigsegg take over Saab and complete work on vehicles in development.
"This is yet another significant step in the reinvention of GM and its European operations," said Carl-Peter Forster, president of GM Europe. "Closing this deal represents the best chance for Saab to emerge a stronger company."
GM announced its intentions to sell or shutter Saab in December, and spent the first months of this year shopping it, along with its Saturn and Hummer brands, to a variety of bidders.
With cash growing extremely short, Saab filed for bankruptcy protection under Swedish law in February, after the Swedish government declined to provide direct operational support or other financing.
Earlier this month, GM announced plans to sell Hummer to a Chinese manufacturer and Saturn to Michigan-based dealership chain Penske Automotive Group.
In addition, GM in May reached an agreement to sell the largest piece of its European operations, Adam Opel, to a consortium of buyers led by Canadian parts maker Magna International.
All those deals are expected to close by the end of the third quarter, roughly the same time GM hopes to emerge from Chapter 11 bankruptcy protection.
The sale of Saab to Koenigsegg reduces GM's presence in Europe to the Chevrolet brand, which represents less than 5% of all sales in the region and is in fact run by GM's Korean subsidiary, Daewoo Auto & Technology.
As a result, GM's prominent role in Europe, the world's largest car marketplace, has all but disappeared as the automaker attempts to reverse years of losses.
GM acquired a 50% stake in Saab in 1989, buying up the remaining shares in 2000. Attempts to make it into a profitable niche luxury brand proved out of reach, and GM has said that it had been a money-loser for some time.
Through the first five months of the year, only 4,607 Saabs have sold in the U.S., according to Autodata Corp., a 55% decline compared with the same period last year. GM's overall sales decline for that period is 37%.
GM has about 220 Saab dealers in the U.S.; by unloading the brand, GM is expected to spare them the ax that has fallen on about 1,350 other GM dealers this year.
Worldwide in 2008, Saab sold just shy of 94,000 cars, about a fifth of them in the U.S. The automaker employs 3,400 people, largely at its factory in Trollhattan, Sweden.
In agreeing to provide support, GM is expected to help complete the relaunch of the brand's 9-5 model, which starts at nearly $42,000 in the U.S.
The 9-5, along with the 9-3, are built in Trollhattan. The other major Saab model, the 9-7X, a sport utility vehicle, was built in Moraine, Ohio, but production was halted this year, and that plant is slated to be closed by 2010. Only 1,358 9-7X vehicles have sold so far this year in the U.S.
"The proposed agreement will enable us to maximize the brand's potential through an exciting new product line-up with a distinctly Swedish character," said Jan Ake Jonsson, managing director of Saab.
Koenigsegg, founded in 1994 by Christian von Koenigsegg, makes the CCX, a super-car capable of speeds well over 200 mph, as well as the CCXR, which runs on ethanol and produces 1,018 horsepower.