Friday, October 09, 2009

Bummer 4 Hummer!

GMC bought the license for the Hummer brand from AM General in 1999...

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.

The purchase represents the first entry into the passenger-auto business for the maker of special-use vehicles, structural parts for highways and bridges, and construction machinery. Li Yan, the head of Tengzhong, has ambitious plans for Hummer, perhaps including a cheaper mass market version for Chinese motorists.

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.

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