General Motors is close to selling loss-making Swedish unit Saab after tiny supercar maker Koenigsegg agreed to ride to the rescue, a source familiar with the talks told Reuters.
A deal would put a company of less than 50 employees turning out a handful of $1 million supercars in charge of Saab, which produces that many family cars every hour.
Sweden would also likely join other governments backing swift rescues of their biggest car companies with state guarantees to help save jobs and one of the country's biggest brand names.
Koenigsegg, whose slinky supercars can top 400 km/h (240 mph) and rank in Forbes magazine's list of the world's 10 most beautiful cars, is backed by Norwegian investors, a source told Reuters on Thursday.
The two sides have signed a letter of intent and financing has been agreed, leaving only minor issues to be resolved, the source said.
Saab said on its website on Friday that new ownership would be finalized in the early summer and Swedish television reported that a preliminary deal was now with the U.S. Treasury Department with further information expected to be released next week.
SURPRISING PARTNERS
Tough times are producing some surprising partnerships, including GM's tentative deal this month to sell Hummer, the expensive, gas-guzzling vehicle of choice for musicians and movie stars, to Sichuan Tengzhong, a Chinese company that makes cement mixers.
Italian maker Fiat, which quit the U.S. market in 1983, is set to return under a new partnership with Chrysler while parts maker Magna International is in talks to buy GM's European operations centred on Germany's Opel.
I'm concerned it doesn't have the scale or expertise to exist as a standalone business, said Nomura analyst Michael Tyndall regarding Koenigsegg.
Saab has not posted a profit in a decade.
I struggle to see how smaller brands can exist as standalone operations -- the industry doesn't have a great track record on this, said Tyndall.
The global recession has slashed demand for cars and sent U.S. giants GM and Chrysler into bankruptcy, leaving Ford as the only one of the so-called Big Three not needing government aid.
Koenigsegg hails from the other end of the automotive spectrum, a tiny firm operating out of an aircraft hangar set up in 1994 by young entrepreneur Christian von Koenigsegg who pocketed some of his fortune selling frozen chickens.
Saab's future could see it turn into a much smaller, niche player, according to Mikael Wickelgren, a vehicle expert lecturer at the University of Skovde, Sweden..
Saab probably would move toward more specialised, niche cars for a smaller customer base, said Wickelgren.
It is a strategy that one has actually heard Saab speak of, but which has been difficult to achieve in a GM context. GM only thinks about volumes.
Saab produced nearly 100,000 cars off last year, about 1 percent of GM's global output.
GM put the company up for sale earlier this year and held talks with a number of potential buyers, including Fiat and Chinese automakers. Talks narrowed to two or three unnamed bidders in recent weeks.
Sale