SAAB AUTOMOBILE AB has scrapped its planned merger with Hawtai Motor of China a week after it was announced, throwing the Swedish carmaker’s future into fresh doubt.
Hawtai appeared to have rescued Saab from the brink of collapse last week when it agreed to pump €150 million into the troubled company. But the deal was met with scepticism in China and Sweden amid doubts over Hawtai’s ability to fulfil the agreement.
Spyker Cars, the small Dutch firm that bought Saab from GM last year, announced yesterday the deal had been cancelled.
“Since it became clear that Hawtai was not able to obtain all the necessary consents, the parties were forced to terminate the agreement,” said Spyker.
The Dutch company said it would continue talks with Hawtai but on a non-exclusive basis.
There has been no production at Saab’s main factory in Sweden for the past month after some suppliers stopped deliveries over unpaid bills. Spyker said production would resume once fresh financing had been secured.
In addition to its Chinese talks, Spyker is in negotiations with the European Investment Bank, its biggest creditor, and the Swedish government over a proposed investment by Vladimir Antonov, the Russian financier. Analysts were sceptical about the Saab-Hawtai tie-up because Hawtai, based in Shandong province, is a small and recent entrant into the fragmented Chinese car industry. The Chinese government is keen to encourage consolidation and has focused support on a handful of bigger, mostly state-owned carmakers. This raised doubts over whether Hawtai would receive Beijing’s blessing for its plan to buy a 29.9 per cent stake in Saab.
Bill Russo, head of Synergistics auto consultancy in Beijing and ex-chief of Chrysler in China, said of Chinese deals: “A foreign company can often be surprised by a deal they thought was done, but is not done because . . . authority is not in the hands of their partner but [with] the government.”
Beijing’s key planning agency, the NDRC which must approve such deals, may have been sceptical Hawtai had the ability to manage a loss-making foreign brand, analysts said.