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.