Saab China Deal: Chinese Government support ‘In Principal’

With the deal for China’s Youngman and Pang Da to take control at Saab outlined, the Chinese Government now says the approve of the deal ‘In Principal’.

Yesterday we had the news that Pang Da and Youngman – the Chinese companies seeking to buy Saab – have outlined the investment they propose to make in Saab.

But the deal to sell Saab is fraught with difficulties for Victor Muller. It’s one thing getting someone to say yes, but there are an enormous number of hoops to jump through before any deal can be finalised.

Most of those hoops revolve around vested interest; GM has a say because Saab uses GM technology and GM is still a shareholder, the Swedish Debt Office has a say as it has guaranteed the loan to Saab from the EIB – which also has say in what happens to Saab.

But perhaps the biggest hurdle is approval from China’s all-powerful NDRC (National Development and Reform Council), which has to approve all deals by Chinese companies outside China.

The NRDC has a remit to control outside investment from China and is mandated to refuse deals it considers inappropriate to China. So the Saab deal is far from done until the man from NRDC says yes. Surprisingly, that’s almost happened.

Reuters interviewed China’s Industrial and IT Minister, Miao Wei, and asked if the Saab deal was likely to get approval. Amazingly – especially considering how tight-lipped the Chinese usually are on these Matters –  Miao Wei said that ‘We support it in principle’.

Now that’s a long way from official approval, but it’s a very big step in the right direction for Trollhattan.

It may all work out at Saab yet.