Chinese Companies Reach a Tentative Deal to Take over Saab

October 28 00:00 2011

New York, October 28 ( – A tentative deal has been reached between two Chinese companies and Swedish Automobile for acquiring the struggling car maker Saab for €100 million ($141 million). The Chinese companies, Zhejiang Youngman Lotus Automobile Co., and Pang Da Automobile Trade Co. have made this move to rescue cash-strapped Saab, which has been fighting for survival since General Motors Co. sold it to a Dutch company now known as Swedish Automobile.

Saab Automobiles has been struggling for survival and to pay its suppliers and staff as production at Saab’s manufacturing plant has been suspended for most of the year. As per the memorandum of understanding reached between Swedish Automobiles and Youngman and Pang Da, all the shares of Saab will be taken over by the Chinese companies. A final agreement will require approval from relevant authorities.

Guy Lofalk, who is in charge of Saab’s reorganization under bankruptcy protection, said that the Chinese deal would improve the chances of a successful outcome, after he withdrew his earlier request to end the takeover process. He said in a document filed at the Vanersborg District Court that “these new conditions must be investigated before a decision can be made on terminating the reorganization.”

A previous agreement had been made by the two Chinese firms for investment of €245 million for a 53.9 percent stake in Saab. However, this deal was held up by Chinese regulators and canceled by Swedish Automobile on Sunday.