GM Hummer Sale Reportedly On the Rocks - TheStreet

BEIJING (

TheStreet

) -- Chinese regulators have rejected a bid by

Sichuan Tengzhong Heavy Industrial Machinery

to buy

General Motors'

troubled Hummer brand,

Reuters

reports, citing a person close to the companies.

Tengzhong was believed to be lobbying behind the scenes for regulatory approval ahead of a deadline at the end of February to close the deal.

Reuters

says officials at the Ministry of Commerce, which must approve all major foreign mergers and acquisitions in China, had said recently they had yet to receive any formal application from Tengzhong.

A source close to the companies told

Reuters

the government had rejected the deal, but that Tengzhong and GM were still looking at alternatives.

An assistant commerce minister reiterated at a briefing Wednesday that the ministry had yet to receive an application, and any reports that the agency had rejected the bid were untrue,

Reuters

reports.

Another source close to the companies told

Reuters

that Tengzhong could use an offshore vehicle to acquire Hummer, which would allow it to skirt Chinese regulations.

GM and Tengzhong

reached a definitive agreement in October for Tengzhong to acquire the Hummer brand. The deal was subject to regulatory approval in both the U.S. and China.

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