Hummer Goes to China for US$150 million

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Oct. 12 – GM’s Hummer brand, long bargained over by Chinese investors for the price tag has been finally purchased by Sichuan-based Tengzhong Heavy Industrial Machinery Co.

“Under the terms of the definitive agreement, the buyer will acquire the ownership of the Hummer brand, trademark and tradenames, as well as specific IP license rights necessary for the manufacture of Hummer vehicles. The buyer will also assume the existing dealer agreements relating to Hummers dealership network,” GM said in a statement.

Tengzhong will now hold an 80 percent stake in Hummer with 20 percent going to Suolang Duoji, a private entrepreneur with holdings that include the Hong Kong-listed thenardite producer Lumena.

Financial terms of the agreement were not disclosed, but it was reported in the South China Morning Post that Tengzhong paid US$150 million for the brand. Under the agreement, Hummer would contract vehicle manufacturing, key components and business services from GM during a defined transitional time period. GM’s Shreveport assembly plant will continue to assemble the H3 and H3T, while AM General’s Mishawaka assembly plant will continue to assemble the H2. Both plants will produce the models until June 2011 with an option extension to June 2012.

The deal is expected to secure more than 3,000 jobs in the United States related to the sale and manufacturing of Hummer vehicles. It is not clear if the U.S. Military will continue to buy Hummer vehicles.