Beijing Automotive Industry Holding Group (BAIC) – China’s fifth largest automaker – has finally agreed to buy technology from General Motors’ Swedish brand, Saab Automobile. The cost and timing of the acquisition is not yet disclosed.
Last week, General Motors (hereafter, GM) has entered discussions with BAIC about a partial sale of assets associated with Saab. The current deal has relieved GM to liquidate other assets associated with Saab, including its headquarters, which involves more than 3,000 jobs in Sweden.
BAIC showed its interest in Saab in order to upgrade its own technology and expand production. Due to the lack of in-house brands, BAIC has decided to set up production in China based on an older generation of Saab vehicles.
According to the deal, BAIC will buy the rights to some powertrain, engine and gear-box technology for Saab’s 9-5 and 9-3 sedans. The production equipment for 9-5 would be moved to China eventually to produce BAIC’s own brand of cars. Saab engineers would help BAIC to integrate the technology into the Chinese company’s cars.
Earlier this year, Shanghai Automotive Industry Corp. (SAIC) intended to acquire a stake in the unit, teaming up with Swedish luxury sports car maker Koenigsegg. However, the deal did not work out. Later, BAIC agreed to provide financing to Koenigsegg, who pulled out of a tentative deal to buy the unit last month.
GM has put the Saab unit up for sale after it pulled through a bankruptcy funded by the U.S. government in July. The automaker is currently focusing on its remaining four core brands – Chevrolet, Cadillac, Buick and GMC.Zacks Investment Research
