GM Said to Not Win Chinese Approval for Hummer Sale
Posted: Tue Feb 23, 2010 1:23 pm
GM Said to Not Win Chinese Approval for Hummer Sale (Update2)
February 23, 2010, 12:54 PM EST
By Katie Merx
Feb. 23 (Bloomberg) -- General Motors Co. failed to win approval from Chinese regulators to sell its Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery Co., said two people briefed on the deal.
A government agency indicated that it won’t provide approval for Chengdu, China-based Tengzhong to purchase the Hummer line of sport-utility vehicles from GM in China, said the people, who asked not to be identified because the decision hasn’t been made public.
The deal may be completed offshore, the people said. Regulators said they won’t block a transaction closed elsewhere, one person said. Suolang Duoji, Tengzhong’s investment partner in pursuing Hummer, has holdings that include 38 percent of Hong Kong-based Lumena Resources Corp., according to data compiled by Bloomberg. Lumena is incorporated in the Cayman Islands.
“The key element here is that both parties want to do the deal,” said Rebecca Lindland, an analyst with IHS Global Insight in Lexington, Massachusetts. “None of these deals to sell car brands are simple. If they still want to do it, it’s still possible it will happen.”
Acquiring Hummer would propel Tengzhong, a closely held maker with products including bridge parts, into the passenger- vehicle industry. The company has said it wants to expand Hummer into China and other expanding markets outside the U.S., which accounted for about two-thirds of the brand’s sales under GM.
Hummer CEO James Taylor and Christina Stenson, a spokeswoman for Tengzhong in New York, each declined to comment. Baodong Wang, a spokesman for the Chinese embassy in Washington, D.C., didn’t have an immediate comment.
To build and sell in China, Tengzhong would still need approval from Chinese regulatory and licensing agencies, according to the people.
Hummer is among four brands, along with Pontiac, Saab and Saturn, that Detroit-based GM is unloading to focus on Chevrolet, Buick, GMC and Cadillac in the U.S. after exiting bankruptcy on July 10.
--Editors: Steve Walsh, John Lear
To contact the reporter on this story: Katie Merx in Southfield, Michigan, at +1-248-827-7130 or kmerx@bloomberg.net
To contact the editor responsible for this story: Jamie Butters at +1-248-827-2944 or jbutters@bloomberg.net.
February 23, 2010, 12:54 PM EST
By Katie Merx
Feb. 23 (Bloomberg) -- General Motors Co. failed to win approval from Chinese regulators to sell its Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery Co., said two people briefed on the deal.
A government agency indicated that it won’t provide approval for Chengdu, China-based Tengzhong to purchase the Hummer line of sport-utility vehicles from GM in China, said the people, who asked not to be identified because the decision hasn’t been made public.
The deal may be completed offshore, the people said. Regulators said they won’t block a transaction closed elsewhere, one person said. Suolang Duoji, Tengzhong’s investment partner in pursuing Hummer, has holdings that include 38 percent of Hong Kong-based Lumena Resources Corp., according to data compiled by Bloomberg. Lumena is incorporated in the Cayman Islands.
“The key element here is that both parties want to do the deal,” said Rebecca Lindland, an analyst with IHS Global Insight in Lexington, Massachusetts. “None of these deals to sell car brands are simple. If they still want to do it, it’s still possible it will happen.”
Acquiring Hummer would propel Tengzhong, a closely held maker with products including bridge parts, into the passenger- vehicle industry. The company has said it wants to expand Hummer into China and other expanding markets outside the U.S., which accounted for about two-thirds of the brand’s sales under GM.
Hummer CEO James Taylor and Christina Stenson, a spokeswoman for Tengzhong in New York, each declined to comment. Baodong Wang, a spokesman for the Chinese embassy in Washington, D.C., didn’t have an immediate comment.
To build and sell in China, Tengzhong would still need approval from Chinese regulatory and licensing agencies, according to the people.
Hummer is among four brands, along with Pontiac, Saab and Saturn, that Detroit-based GM is unloading to focus on Chevrolet, Buick, GMC and Cadillac in the U.S. after exiting bankruptcy on July 10.
--Editors: Steve Walsh, John Lear
To contact the reporter on this story: Katie Merx in Southfield, Michigan, at +1-248-827-7130 or kmerx@bloomberg.net
To contact the editor responsible for this story: Jamie Butters at +1-248-827-2944 or jbutters@bloomberg.net.
