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Sichuan Tengzhong To Purchase HUMMER From GM

Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd (Tengzhong) and General Motors Corp. confirmed that the China-based industrial machinery group will acquire the rights to the premium off-road HUMMER brand, along with the existing senior management and operational team. GM had earlier announced the signing of a memorandum of understanding on the sale, without identifying the prospective buyer. (Earlier post.)

Tengzhong will also assume existing dealer agreements relating to HUMMER’s dealership network. It is contemplated that Tengzhong will, as part of the transaction, enter into a long-term contract assembly and key component and material supply agreement with GM. In an earlier statement, GM said it expects the deal if successful to secure more than 3,000 US jobs. The final terms of the deal are subject to final negotiations.

Based in the Chinese province of Sichuan, Tengzhong is a privately-owned company and a leading domestic manufacturer of road, construction and energy industry equipment. It will expand into the premium off-road vehicle segment through what will be a strategic acquisition for Tengzhong.

The HUMMER brand is synonymous with adventure, freedom and exhilaration, and we plan to continue that heritage by investing in the business, allowing HUMMER to innovate and grow in exciting new ways under the leadership and continuity of its current management team. We will be investing in the HUMMER brand and its research and development capabilities, which will allow HUMMER to better meet demand for new products such as more fuel-efficient vehicles in the US.

—Yang Yi, CEO of Tengzhong

HUMMER will continue to maintain its headquarters and operations in the US, and will continue to be managed by its existing leadership team. The team intends to expand HUMMER’s dealer network worldwide, particularly into new markets such as China.

The transaction is expected to close in the third quarter of this year and is subject to customary closing conditions and regulatory approvals. Financial terms of the agreement will not be disclosed at this time.

Credit Suisse is acting as exclusive financial advisor and Shearman & Stearling is acting as international legal counsel to Tengzhong on this transaction. Citi is acting as financial advisor to GM.

Comments

ToppaTom

Hummer itself might be synonymous with adventure – but that’s nothing compared to buying it.

A bit like buying a pay phone franchise.

How about a nice bridge from Brooklin.

Andrey Levin

Hummer H3 is built on Ghevy Tahoe platform and is powered by standard GM 6.2l V8 engines. H3 is built on Chevy Colorado platform. It is powered by standard GM Vortex 3700 engine. Both vehicles have nothing in common with legendary HUMVEE, except for some resemblance in sheet metal design. Notably, Hummers have antiquated solid beam rear axle, which severely limits off-road capabilities.

Despite being quite popular in some markets (Russia, ME), this vehicles are simply outdated GM SUVs dressed in macho image. I doubt long-term popularity of this junk.

Peace Hugger

Dumb and dumber.

bw

With out the GM parent, HUMMER may be able to evolve into more of a more relevant off road machine rather that a niche marketing exercise of a GM pick-up.

It is probably an exciting time at HUMMER. Lets hope they can forget their GM upbringing and become more like the original Saturn Corporation before it became another badge engineering product.

SJC

It sounds like they are finding homes for Hummer, Saab and Saturn. I wonder how the platform common sub assemblies will work. If the H2 is based on the Tahoe, what economy of scale will be in effect with separate companies?

SJC

Here is a good little cartoon about Chinese Hummers:

http://www.cbsnews.com/stories/2003/03/10/opinion/main543348.shtml

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