Takeover bid

The Swedish sports car maker Koenigsegg said costly delays had made the deal uncertain.

"We regret that after six months of intense and focused work we have reached the painful and difficult decision that we will not be able to go ahead with the purchase," the head of the company, Christian von Koenigsegg, said in a statement.

Koenigsegg said the time factor had always been critical for their strategy to breathe new life into the company.

GM had been hoping to complete the deal by the end of December after signing a preliminary agreement earlier this year. Industry sources say there are no other bidders for the Saab company. Closure of Saab's production plants could lead to the loss of 3,000 jobs.

In a statement, GM CEO Fritz Henderson confirmed that the potential buyer had pulled out of the talks, saying that everyone involved was very disappointed.

"Given the sudden change in direction, we will take the next several days to assess the situation“, said Henderson.

GM, which filed for bankruptcy protection for a six-month period this year, had announced it planned to sell the Swedish subsidiary as part of a sell-off of assets which originally also included its German subsidiary Opel.

Koenigsegg, a tiny sports car manufacturer which makes just 18 cars a year, teamed up with Beijing Automotive Industry Holding Co Ltd (BAIC) to buy Saab in September but still needed a 400-million-euro (600-million-dollar) loan from the European Investment Bank (EIB) to complete the deal. The bank approved the consortium's takeover bid in October, subject to an endorsement from the Swedish government, which would act as guarantor.

The European Commission also would have had to give its stamp of approval that the planned deal did not violate EU competition law on state subsidies.

nrt/AFP/dpa

Editor: Michael Lawton