Saab Runs Out of Gas

Posted Dec 18th 2009 5:30PM by Tom Taulli
Filed under: General Motors (GM)

When it comes to selling companies, General Motors has had some bad luck lately. The company pulled its deal for Opel off the market. Then its proposed sale of Saturn failed (the company is in the process of being liquidated).

As for this week, there was another dead deal: the sale of Saab to Spyker Cars. And yes, Saab will now be unwound.

What happened here? So far, GM and Spyker have not provided any details. Basically, there were some "issues" that couldn't be resolved.

Keep in mind that there was another deal for Saab. But the proposed buyer, Koenigsegg Group AB, also backed out.

True, Saab has some attractive features. The brand is about 72-years old. And, it can cost billions to build such a brand. Saab also has a full-blown manufacturing platform and the ability to sell on a global basis.

But the fact remains that the global car market is overloaded with excess supply, which has heavily impacted Saab (deliveries are down 61% for the year so far in the U.S.). In other words, to make a deal work, there would likely need to be some major financial incentives. But such things are hard to come by.

Although, GM was still able to get something from Saab; that is, a deal to sell certain technologies and tooling to Beijing Automotive Industry Holdings Co.

Tom Taulli advises on business tax preparation and resolving tax problems. He is also the author of a variety of books, including the including The Complete M&A Handbook. His website is at Taulli.com.

Tags: automobile industry, Beijing Automotive Industry Holdings Co, GM, inthenews, Koenigsegg, Saab