General Motors last night said Sichuan Tengzhong Heavy Industrial Machines (Tengzhong) was “unable to complete” the acquisition of its Hummer SUV unit. Tengzhong told news agency AFP it withdrew its offer because it could not obtain regulatory approval from Chinese authorities.
“As a result, GM will begin the orderly wind-down of the Hummer operations,” the US automaker said in a statement.
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Tengzhong said it was “disappointed” that it was unable to pursue the “tremendous opportunity” to help transform the gas guzzlers into greener vehicles.
It was “unable to obtain clearance of the transaction from the Chinese regulators within the proposed deal timeframe”.
“Following talks with GM, both sides have decided to discontinue discussions on the transaction and terminate their definitive agreement,” the Chinese company said in a statement.
Last month, Tengzhong said it had agreed with GM to extend an original deadline of 31 January by one month to the end of February, as the company sought the go-ahead from Chinese regulators.
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By GlobalDataBut China’s commerce ministry reiterated on Wednesday that since October, when the two firms said the deal had been “finalised”, it had never received an application from Tengzhong to buy Hummer.
The Chinese company said it had “worked earnestly to achieve an acquisition that it believed to be a tremendous opportunity to acquire a global brand at an attractive price”.
It said its investment in the brand would have given the Hummer team “the ability to build greener utility vehicles that would have been attractive and useful in new markets such as China as well as the existing core markets”.
“One year ago, General Motors announced that we were going to divest Hummer, as part of focusing our efforts on Chevrolet, Buick, GMC and Cadillac going forward. We have since considered a number of possibilities for Hummer along the way, and we are disappointed that the deal with Tengzhong could not be completed,” said GM vice president of corporate planning and alliances, John Smith, who was also closely involved in evaluating potentiial buyers for Opel and the sale of Saab, finally completed this week.
“GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner.”
GM said it would continue to honour Hummer warranties, while providing service support and spare parts to Hummer owners world-wide.
Hummer sale to Tengzhong remains uncertain
