Tengzhong Hummer deal not closed yet
By Fang Yan and Michael Wei |
December 3, 2009, Thursday
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Print Edition
Print Edition
HOPES that China's Tengzhong will complete the deal to buy General Motor's Hummer brand as early as this week appear unlikely to be fulfilled, with the regulator tasked with assessing the deal yet to receive a formal application, according to a regulatory source.
Nearly two months have passed since GM signed a deal to sell its iconic but tarnished Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery, an obscure Chinese machinery maker.
Hummer's CEO Jim Taylor told Automotive News last month he hoped a deal would be closed on Tuesday but the deal needs approval from China's Ministry of Commerce, which is still awaiting documents from Tengzhong.
"We have not received formal application materials from Tengzhong," said an official of the ministry, who didn't want to be named due to the matter's sensitivity.
"The Tengzhong-Hummer issue is not on our agenda yet," the official told Reuters.
However, Tengzhong said it had been in touch with the Chinese government since before closing the landmark Hummer deal with the Detroit auto maker in early October.
"We have been cooperating with the government all along and have submitted whatever materials needed for the approval," said a Tengzhong representative. "There is little we can do at this stage. We can only wait."
A ministry spokesman declined to comment.
Chinese manufacturers are venturing onto the global stage with bids for Western brands to take advantage of a steep industry downturn, but there remain doubts on whether they can handle such deals given their lack of expertise and limited international exposure.
For Tengzhong, the challenge is even greater, as on top of turning around GM's struggling gas guzzler, it needs to clear regulatory hurdles for a deal which runs counter to China's energy efficiency drive.
Taylor, the GM executive who has helped steer the sale and will remain as the new company's chief executive, was told that approval would take four to six weeks after closing the deal, according to Automotive News.
Analysts say the apparent foot-dragging by the ministry suggests there are opposing voices in the Chinese government against the Hummer transaction.
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