State-run Beijing Automotive Industry Holdings will take a minority stake in Koenigsegg as part of the Swedish luxury carmaker's purchase of General Motors' Saab unit, in the latest push by a Chinese auto firm to secure a global footprint.
The agreement came just hours after another Chinese carmaker, Geely Automotive, said its parent wanted to buy Saab's Swedish rival Volvo Cars Corp, which has been put up for sale by U.S. parent Ford.
This is an important step on the road toward a new Saab. We have a well prepared business plan, an important partnership and we are ready to proceed without state financing, Koenigsegg Chief Executive Christian von Koenigsegg said of his firm's bid for Saab.
Koenigsegg, backed by U.S. and Norwegian investors, struck a deal earlier this year to buy GM's loss-making Saab Automobile business, but its ability to finance the purchase had remained in question.
BAIC dropped out of the race for GM's Opel unit in July and had been tipped by some as a possible bidder for Volvo Cars.
Chinese automakers have been seeking to make inroads into the global auto market in recent years, eyeing international brands in a push to expand and secure cutting-edge technology.
But overseas deals by major Chinese automakers, such as SAIC Motor Corp's 2004 purchase of a stake in Korea's Ssangyong Motor Co, have met with mixed results.
Chery Automobile, Hunan Changfeng Motors Co and others have all held initial talks with European or U.S. auto brands but balked at firm commitments.
If you look at the Chinese carmakers, arguably where they are behind ... is in the technology area, Nomura analyst Michael Tyndall said.
The problem with a company like Saab is that it doesn't own the technology -- GM or Opel does -- so I wonder with Saab what you actually get.
BAIC, controlled by the Beijing government and number five car maker by unit sales so far this year, aims to more than double its annual volume to 2 million vehicles by the end of 2015 from 771,639 units in 2008.
The Chinese automaker's output already easily eclipses that of Saab, which produced just over 93,000 cars last year, while Koenigsegg rolled out just 18 of its top-end sportscars.
BAIC does not even have its own car brand.
Its four-year-old Mercedes-Benz car venture with Daimler AG
broke even last year and its tie-up with Hyundai Motor Co has a long way to go before catching up with top players in the market such as Volkswagen AG.
DEAL BY OCTOBER
CEO Koenigsegg declined to comment on how much capital would come from BAIC under the agreement, but said its plans for Saab required in the region of of 11 billion Swedish crowns ($1.56 billion).
We are now completely convinced that we will be able to complete the deal by the end of October, Saab spokesman Eric Geers said. This naturally also offers fantastic opportunities for Saab in the Chinese market.
Swedish Enterprise and Energy Minister Maud Olofsson told journalists she welcomed the news. But whether the deal safeguards Swedish production remains to be seen.
If Beijing puts the capital behind and really invests in Saab as GM never did, then it could emerge as a strong competitor, but that will take a long time, Stuart Pearson, analyst at Credit Suisse said.
It gives it (Saab) a future - it may not necessarily be a future for Swedish jobs.
(Writing by Niklas Pollard; additional reporting by Simon Johnson, Veronica Ek, Jens Hansegard and Nicolas Vinocur; editing by Elaine Hardcastle and Simon Jessop)