More than three years after it acquired British car brand Jaguar Land Rover, Tata Motors may spread its wings in the Scandinavian market. The Indian automaker, which last week placed a bid for the assets of bankrupt Swedish carmaker, Saab, for around $350 million, would be pitted against the likes of Volvo and Chinese auto giant Youngman, sources said.
It is understood Tata?s global acquisition team has been in negotiations with Saab and private equity players for a prospective acquisition for JLR. When contacted, a Tata Motors spokesperson said, ?We do not comment on speculation.?
According to Saab officials, the company has received at least five bids, mostly from outside Sweden. However, the company did not divulge the details.
Saab?s trustee Hans Bergqvist said last week that the offers were filed before a Monday deadline, but he declined to specify how many bids were received or how long a deal might take. Youngman has long been interested in Saab and tried to snap it up before it declared bankruptcy, but those efforts were thwarted by the Swedish brand’s former owner, GM, which balked at transferring the necessary technology licences.
Now, the Chinese car maker may also have placed a renewed bid, sources said.
However, it is now left to be seen how Tata Motors manages to negotiate with GM, which has so far reneged on parting technology know-how. The test also gets tough for Tata Motors, seeing the recent example of Turkish private equity firm Brightwell Holdings, which has withdrawn a bid to buy Saab owing to a lack of cooperation from GM, according to the Turkish company.
Experts said taking over Saab may allow Tata Motors to enter the Scandinavian market and complement its Jaguar Land Rover acquisition, thus filling the market void between the entry-level products that Tata makes and the premium Jaguar cars. But, if Tata Motors manages to acquire Saab , its entry into the European market would be heavily bolstered by its presence marked by JLR, which has been successfully turned around in three years. In January, Mahindra and Mahindra had signed a confidentiality agreement with the bankrupt company and was in the process of finalising its bid. However, it could not be independently verified whether the company has so far placed a formal bid for buying out Saab.
After six decades of building the distinctive teardrop-shaped cars, Saab sought bankruptcy protection in December after its owner, General Motors, failed to come to an agreement with Youngman that wanted to take control.
At issue were rights to technology that GM did
not want to forfeit to potential competitors. GM first bought 50 % of Saab in 1990 and fully owned it from 2000 until it sold the Swedish brand already on the brink of bankruptcy to Dutch carmaker Spyker ? now called Swedish Automobile.