The top economic planning agency in China is likely to reject Sichuan Tengzhong’s bid to buy Hummer from bankrupt General Motors, state radio said on Thursday.
Go deeper with GlobalData
The National Development and Reform Commission (NDRC), is worried that Sichuan Tengzhong Heavy Industrial Machinery, which makes special-use vehicles and highway components, does not have the experience and resources to run the Hummer business, the radio said, according to Reuters.
Hummer, as an expensive, gas-guzzling sports utility vehicle, would not fit in with the Chinese government’s policy of encouraging energy-efficient vehicles, the radio said.
Reuters noted that China has a complicated, fragmented system to regulate overseas investments involving many government bodies, including the NDRC, the ministry of commerce and the state administration of foreign exchange.
To further regulate overseas acquisitions by Chinese firms, the NDRC last Friday issued an order requiring Chinese companies to report intended overseas acquisitions to the central government in Beijing before signing legally binding contracts.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataBut the Ministry of Commerce recently sounded a more positive note about the proposed deal, saying the bid was normal behaviour for a company seeking to take advantage of the global downturn, the news agency added.
