IMPORTANT NEWS: National Electric Vehicle Sweden has agreed to buy the assets of Saab Automobile and the sale is expected to be finalized during the summer.

Monday, June 13, 2011

New and revised China deals worth EUR 245 million for Saab

Saab has just issued a press release saying that Zhejiang Youngman Lotus Automobile Co. Ltd. will be the third partner in the joint venture to produce and distribute Saab vehicles in China, and will also take a 29.9 % share in Saab's parent company Spyker Cars.

On 16 May Saab entered into a partnership with Pang Da Automobile Trade Co. Ltd for joint venture distribution and manufacturing of  Saab-branded and child brand vehicles in China, a third partner was to be selected later. The thirds partner has now been selected and is Youngman.

The companies have signed a non-binding memorandum of understanding (MOU), which includes an equity participation in the total aggregate amount of about EUR 245 million as well as the strategic alliance. The MOU is subject to agreement on definitive transaction documents and certain conditions, which include consents from Chinese and Swedish governmental agencies and the European Investment Bank and General Motors.

As reported earlier Youngman is the only Chinese company which has applied to China's National Development and Reform Council (NDRC), which is China's top economic planning body, to be allowed to enter into a deal with Saab. The NDRC made it clear last month that Youngman is the preferred partner for Saab. This should indicate that the deal between Saab and Youngman has a good chance of being approved by Chinese authorities.

In the joint venture manufacturing Youngman will take 45% of the shares, Saab 45% and Pang Da 10%, and in the joint venture distribution Youngman will take 33% of the shares, Pang Da 34% and Saab Automobile 33%.

Youngman will also take a 29.9 % interest in Saab's parent company Spyker Cars investing EUR 136 million. Pang Da will remain at 24 % raising its investment to EUR 109 million.

This means that the Chinese companies will have a majority share in Spyker Cars and thus Saab Automobile, with 54 %. But that does not necessarily mean that they will have a controlling interest. That depends on the constitutional document and/or the shareholders' agreement.