GM Finalizes Deal To Sell Hummer To Tengzhong
General Motors Co. said it has finalized an agreement to sell its Hummer brand to China's Sichuan Tengzhong Heavy Industrial Machinery Co. (STHIM.YY), four months after the companies reached a preliminary deal.Terms weren't disclosed, but people close to the talks told the Wall Street Journal earlier Friday the price tag was $150 million.
A finalized deal - which needed the blessing of China's government - has important overtones. It represents the country's first full-fledged acquisition of a troubled auto brand in the wake of the global economic crisis, which sent some auto makers such as GM teetering further. A flurry of such potential deals highlights Chinese companies' global ambitions, but a question remains as to whether Chinese companies such as Tengzhong would be able to revitalize troubled auto brands, especially given their executives' limited experience running global operations.
Tengzhong is buying 80% of Hummer, with local tycoon, Li Yan buying the rest. The 46-year-old is chairman of the Sichuan-based company, which he founded and successfully listed on the Hong Kong Stock Exchange in June. Lumena is one of the world's biggest producers of sodium sulphate, a key raw material used in detergents, glass and pharmaceutical products.
Finalizing the sale for Hummer comes little more than a week after its planned sale of the Saturn brand to Penske Automotive Group Inc. (PAG) fell through. GM is also trying to sell the Saab brand as part of its restructuring, while the Pontiac line will be phased out the next year.
Source;
http://online.wsj.com/article/BT-CO-20091012-707678.html
