The Chinese regulator that economists and business experts expected to put the brakes on Tengzhong’s bid to buy HUMMER have essentially bowed out of the debate Thursday.
The Chinese National Development and Reform Commission sent Tengzhong’s application back earlier this week for more details, a move which many in the media believed to be a sign of non-approval.
However, after reviewing the details more closely, a top official at the NDRC told Reuters that “according to the full documents they submitted, the Tengzhong deal does not belong to overseas investment, but rather should be seen as a trade in technology and services, because they want to buy the brand, the technology and the patents,” and added that this meant the Ministry of Commerce, not the NDRC, would have the ultimate authority on the decision.
The Minisitry of Commerce hadn’t reviewed the application as of earlier this week, but in general has made supportive comments about the deal by saying that “this is not a decision for the government. It’s an active strategy for companies in the course of globalization.”
This is a big step in the HUMMER approval process, and will most likely lead to completion of the deal.