Billionaire financier Ronald Perelman is close to entering a joint venture to give him operating control of AM General Corp., which makes the Humvee military vehicle and its civilian offshoot, the Hummer truck, the Wall Street Journal reportedly said on Tuesday.
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According to Reuters, the newspaper said the deal values AM General at about $935 million and, barring any last-minute hitches, the pact could be completed as early as Tuesday.
Lawyers on Monday reportedly were working on the venture between Perelman’s MacAndrews & Forbes Holdings Inc. and Renco Group Inc., the private holding company that controls AM General.
Renco is led by veteran dealmaker Ira Rennert, who took over South Bend, Indiana-based AM General for $133 million in 1992, the report said.
Reuters said Perelman, who also controls cosmetics giant Revlon Inc., would take control of AM General, whose roots date to 1903.
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By GlobalDataIn 1971, the company became a unit of the now defunct American Motors Corp., maker of the iconic Pacer automobile, whose bulbous lines gave it the look of a spaceship or an upside-down bathtub, the report noted.
Reuters said that, in 1979, AM General began preliminary design work on the M998 Series High Mobility Multi-Purpose Wheeled Vehicle, or Humvee, a 1.25-ton truck intended to replace the M151 and other light tactical vehicles.
The US Army in 1983 awarded AM General its first Humvee contract and nine years later, AM General launched the Hummer, a civilian version of the Humvee, and in 1999 it acquired backing from General Motors Corp., the report added.
Reuters said GM now markets and distributes the gas-guzzling Hummers and, through July, had sold 15,332 of the vehicles in 2004, down 22% from 19,629 a year earlier.
