
GM Seals Hummer Sale
DETROIT (
) -- Hummer has a new owner.
General Motors
and
Sichuan Tengzhong Heavy Industrial Machinery
said Friday they have reached a definitive agreement enabling Tengzhong to acquire the Hummer brand. Terms were not disclosed. The deal requires regulatory approval in both the U.S. and China.
Under the agreement, Hummer would contract with GM for manufacturing, key components and business services, at least until June 2011. GM's Shreveport assembly plant would continue to assemble the H3 and H3T, while AM General's Mishawaka assembly plant would continue to assemble the H2. The contract, which secures more than 3,000 U.S. jobs related to Hummer sale and manufacturing, has an optional extension until June 2012.
Hummer will retain its existing leadership team, including CEO James Taylor, former general manager of Cadillac. "We are fortunate to have a partner who understands and recognizes the importance of continuing investment in Hummer's heritage as a U.S.-based and branded company with a view toward capitalizing on global opportunities," said Taylor, in a prepared statement.
The partnership buying Hummer will be 80% owned by Tengzhong and 20% owned by private entrepreneur Suolang Duoji. Tengzhong is one of China's major privately owned manufacturers of heavy machinery equipment. "This transaction marks an exciting step for both Tengzhong and Hummer, as we invest in a business that has significant opportunity in the U.S. and around the globe," said Yang Yi, chief executive officer of Tengzhong, in a prepared statement.
For the deal, Credit Suisse is exclusive financial adviser. Shearman & Sterling is international legal counsel to Tengzhong and Citi is financial adviser to GM.
-- Written by Ted Reed in Charlotte, N.C.
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