A Chinese industrial machinery company’s plan to buy the Hummer brand from GM could run into regulatory objections in China, according to a Chinese media report.
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Sichuan Tengzhong Heavy Industrial Machinery Co. agreed to purchase Hummer from GM earlier this week.
Under the proposed deal, Tengzhong, a major industrial machinery group, will acquire the rights to the premium off-road Hummer brand, along with a senior management and operational team. It will also assume existing dealer agreements relating to Hummer’s dealership network.
“Government agencies are unlikely to agree,” the Shanghai Securities News reported, citing an unnamed source.
“This overseas acquisition is not in line with the state’s auto industry policy. In principle, domestic auto companies are not encouraged to make outbound acquisitions at the moment,” the source told the newspaper.
The deal, expected to be closed by the end of the third quarter, will need nods from several government agencies, including the Ministry of Commerce and the National Development and Reform Commission, according to an AFP report.
Chinese media also says there also concerns over whether Tengzhong is capable of funding the deal.
