Saab back in the race - just

Saab wagonSaab has again been pulled from death row, right at the last minute. The once highly respected car brand is set to be offloaded from Swedish Automobile NV to Chinese investors Pang Da and Youngman. The sale price is €100m for Saab Auto and their British operation. However, Saab won't be completely safe until the cash is in the bank. It's not a done deal, yet.

Deal details

There's quite a bit of potential wrangling to come, like most M&A deals. Who will pay Saab workers while the small print is dealt with (Saab had another payday for 1,500 factory workers on 25 Oct)? Will the agreement include use of the Saab name if production is moved - to China, for instance?

Then there's General Motors (GM), who previously agreed to supply engines for future models. Will they fold in too, not to mention the Swedish and Chinese regulators? Saab already owes around £200m in preferred shares to GM. This is debt that the Chinese investors will have to absorb. So the Chinese still have room to manoeuvre.

Brand whiplash

Saab fans, then, should curb their enthusiasm. The brand's image has also been through the media mincer. Sales have been awful for some time - Saab barely sold 31,000 cars last year, compared to pushing 140,000 a few years ago.

A few more twists and turns to the final finish, then. After that, it's the long haul back to commercial credibility for Trollhättan HQ. Can it be done? Saab boss Victor Muller, a wealthy Dutchman, is in a better position to know than most. He has lost around €70m of his own cash in Saab Auto.

Do the Chinese know better than Muller? There's a Chinese proverb: "To know the road ahead, ask those coming back." But then there's plenty of others. "Failure is the mother of success." Frankly, who knows.
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