General Motors Co. said it has signed a definitive agreement to sell its Hummer sport-utility brand to a Chinese heavy-equipment maker, potentially achieving an important goal in the U.S. auto company’s post-bankruptcy makeover.
Sichuan Tengzhong Heavy Industrial Machinery Co. intends to purchase Hummer through an investment entity, in which it would hold an 80 percent stake, GM said Friday. Suolang Duoji, a private entrepreneur, would hold the remaining 20 percent. Duoji’s holdings include Lumena Resources Corp. in Hong Kong.
Although terms of the deal weren’t disclosed, published reports out of China said Tengzhou will pay $150 million for Hummer. The deal follows lengthy talks that were disclosed in June, when GM and Tengzhong said they had reached a preliminary agreement.
The Chinese company, based in Sichuan province, would acquire the Hummer brand and trademark, as well as a license to manufacture the vehicles. It also would inherit the existing Hummer dealership agreements.
Signing an agreement is no guarantee a transaction will be completed — as GM learned last week when the deal to sell its Saturn unit to a U.S. auto dealership chain fell through.
“In the auto industry that we’re in today, nothing is final until it’s final,” said Rebecca Lindland, an analyst with IHS Global Insight. “Whether it’s Saturn or this deal, the risk is always there that it will fall through.”
