GM announced its entrance into a definitive agreement to sell its Hummer unit to China’s Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd. Sichuan Tengzhong will purchase Hummer through an investment entity. “HUMMER is a strong universal niche brand and this agreement signifies another important milestone in writing the next chapter for both GM and HUMMER,” said Fritz Henderson, GM President and CEO. “For HUMMER, the mixture of its knowledgeable leadership team, vehicle design expertise and the capital financing of Tengzhong portend a successful future.”
Although GM did not disclose the financial terms of the agreement media reports claim that the sale price was around $150 million.
GM said that the Chinese company 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.
Sichuan Tengzhong will also get manufacturing, key components and business services from GM during a transitional time period, which was not defined by the Detroit automaker. As an example, GM said that its Shreveport assembly plant would continue to contract assemble the H3 and H3T models while AM General’s Mishawaka assembly plant will continue to assemble the H2, both until June 2011, with an optional one year extension until June 2012.