Further to the preliminary deal reached between General Motors (GM), the US automaker that emerged out of bankruptcy, and China's Sichuan Tengzhong Heavy Industrial Machinery Co Ltd (Tengzhong) in June, both the companies reached a definitive agreement yesterday, by which Tengzhong will acquire GM's premium sports utility vehicle (SUV) brand 'Hummer'.
Although the financial terms of the transaction was not disclosed by GM, analysts surmise that the sale of the Hummer would fetch GM around $150 million.
Under the terms of the agreement, Tengzhong will buy the ownership of the 'Hummer' brand, trademark and trade names as well as specific intellectual property license rights necessary for the manufacture of Hummer SUVs, apart from assuming the existing dealer agreements relating to Hummer's dealership network.
Privately-owned engineering major Tengzhong intends to acquire Hummer by investing in its 80 per cent stake, while a private Chinese entrepreneur Suolang Duoji will purchase the remaining 20 per cent stake.
The transaction is expected to close in the first quarter of 2010, subject to customary closing conditions and regulatory approvals in US and China.
Tengzhong will retain all the existing senior management and operational team, including its chief executive officer James Taylor.