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GM Signs Deal with Hummer
By Jenn Trap on 2009-10-09 15:52:16
General Motors said Friday that it would sell its rugged Hummer brand, once an integral part of its growth strategy for sport utility vehicles, to a Chinese heavy equipment maker and a private investor.
The sale to Sichuan Tengzhong Heavy Industrial Machinery marks another step in G.M.’s drastic downsizing after emerging from a government-financed bankruptcy in July. G.M.’s discussions with Sichaun Tengzhong were first revealed in June, The New York Times’s Bill Vlasic reports from New York.
G.M. said in a statement that it hoped to close the sale by early next year. No terms were announced, but people with knowledge of the deal estimated the price at $150 million.
Sichaun Tengzhong plans to acquire Hummer through an investment entity in which it will hold an 80 percent stake, with the remaining 20 percent held by the Chinese entrepreneur Suolang Duoji.
Under terms of the agreement, G.M. will continue to make Hummers for the new owners at a Louisiana assembly plant for two years. An additional Hummer model will be built at an Indiana plant operated by AM General, which sold the license for the brand to G.M. in 1999.
Sichuan Tengzhong will take over franchise agreements with Hummer’s 153 dealers in the United States and 231 dealers in international markets.
The sale to Sichuan Tengzhong Heavy Industrial Machinery marks another step in G.M.’s drastic downsizing after emerging from a government-financed bankruptcy in July. G.M.’s discussions with Sichaun Tengzhong were first revealed in June, The New York Times’s Bill Vlasic reports from New York.
G.M. said in a statement that it hoped to close the sale by early next year. No terms were announced, but people with knowledge of the deal estimated the price at $150 million.
Sichaun Tengzhong plans to acquire Hummer through an investment entity in which it will hold an 80 percent stake, with the remaining 20 percent held by the Chinese entrepreneur Suolang Duoji.
Under terms of the agreement, G.M. will continue to make Hummers for the new owners at a Louisiana assembly plant for two years. An additional Hummer model will be built at an Indiana plant operated by AM General, which sold the license for the brand to G.M. in 1999.
Sichuan Tengzhong will take over franchise agreements with Hummer’s 153 dealers in the United States and 231 dealers in international markets.
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