MOC: no application for Hummer deal received
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China's Ministry of Commerce said Saturday it has not received any application from Sichuan Tengzhong Heavy Industrial Machinery Co. over the Hummer deal.
General Motors Co. and Tengzhong announced Friday that the two companies have finalized the deal of Tengzhong acquiring GM's off-road Hummer brand.
Under the deal, Tengzhong will acquire the ownership of the Hummer brand, its trademark and trade names, as well as use of patents needed for the manufacture of Hummer vehicles. The Chinese company will also assume Hummer's dealership agreements with the brand's existing dealers.
The purchase will be made through an investment entity, in which Tengzhong will hold 80 percent of stakes.
Financial terms of the agreement were not disclosed. Media reports said the price is about 150 million U.S. dollars, some business people even estimated a value of 100 million U.S. dollars, but it was not confirmed.
According to China's regulations, overseas investment that involves more than 100 million U.S. dollars should be approved by the Ministry of Commerce.
Tengzhong, a Chengdu-based little-known heavy machinery maker reached a preliminary agreement with GM in early June to buy Hummer, an American luxury automobile marque.
However, the deal became less significant than it had been presumed as the Chinese side does not control the core technologies of Hummer and it's unlikely that Hummer will establish a new plant in China, analysts said.
For that, Zhao Wei, an official with Sichuan Provincial Commission of Development and Reform, said, "It is indeed a deal, not a purchasing."
The whole process is rather an advertisement for both sides, helping to raise the value of the unpopular Hummer Brand and enhance the publicity of the little-known Chinese company, said Yang Cheng, general manager of a Hummer sales center in Sichuan.
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