GM just announced that Tengzhong, a company based in Sichuan, China, is currently in advanced talks to purchase HUMMER, confirming earlier reports.
Complete release below.
DETROIT and SICHUAN, June 2, 2009 – Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd (Tengzhong) and General Motors Corp. today confirmed details of their proposed transaction, pursuant to which, Tengzhong, a major industrial machinery group, will acquire the rights to the premium off-road HUMMER brand, along with a senior management and operational team. It 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 and a catalyst for HUMMER’s growth in the U.S. and around the world.
“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,” said Yang Yi, CEO of Tengzhong. Mr. Yang continued, “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 U.S.”
HUMMER will continue to maintain its headquarters and operations in the U.S., and will continue to be managed by its existing leadership team. The team intends to expand HUMMER’s dealer network worldwide, particularly into new and underserved markets such as China.
“Today HUMMER is a globally recognized brand with excellent growth prospects, both in terms of new markets and new products for our existing markets,” said James Taylor, HUMMER chief executive officer. “With Tengzhong’s investment and strong support, we will be able to make our visions a reality. This transaction, if successful, will secure more than 3,000 U.S. jobs, and allow us to embark on a more aggressive global expansion, ensuring a successful future with our new partners.”
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.
General Motors Corp., one of the world’s largest automakers, was founded in 1908, and today manufactures cars and trucks in 34 countries. With its global headquarters in Detroit, GM employs 235,000 people in every major region of the world, and sells and services vehicles in some 140 countries. In 2008, GM sold 8.35 million cars and trucks globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM’s largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM’s OnStar subsidiary is the industry leader in vehicle safety, security and information services. More information on GM can be found at www.gm.com.
Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd. (“Tengzhong”) is one of China’s major privately owned engineering companies. Tengzhong is a manufacturer of heavy machinery equipment with a presence in special-use vehicles, road and bridge construction equipment and construction and energy industry equipment.
Since its establishment, Tengzhong has quickly become a major manufacturer of machinery and construction components through a series of successful acquisitions. Tengzhong prides itself on its automated manufacturing equipment, its processing systems, significant research and development initiatives and commitment to innovation.
GM should not sell the technology of one of the best off road trucks built to the Chinese.The US government should step up and help keep Hummer owned by a US company.The Chinese have a bad track record and this is not what needs to be part of Hummer.We need to voice our opinions and let GM now how we feel.Hummer will fail if it sold to the Chinese.Just like the toys and bad food that come from China Hummer will have that made in China to pull it down.This is the time we need to back made in the USA.Hummer technology was made in the USA and needs to stay that way.I will never buy a Chinese Hummer.I will keep my GM built Hummer till the wheels fall off.I hope the deal fall thrugh.I would reather see Hummer go out than be owned by the Chinese.
A U.S. Gov’t bailout of HUMMER? With liberals in charge and conservatives against bailouts? Not a chance!
This acquisition allows HUMMER to come out with great new products and stay alive.
Wow when I scrowled down and saw that flag on that truck I almost fell off my chair and that’s no kidding! Turns me off. Well the chinese have bought a product they can put radiator fluid in that will not hurt anyone. I’m at a loss for words, it’s their’s now so good luck.
Iam a GM retiree.Don”t understand selling Hummer to China.Sold it on the low side anyway,why not keep Hummer in USA .Will not buy China Hummer.Why didn”t GM just do the right thing.
Yes – drive until the wheels fall off if Hummer not American owned. My son was thinking that when he was out of school he would buy a Hummer – not if the Chinese own – it will be a F-150.