Hummer Faces Shutdown After Chinese Sale Collapses
From the Associated Press:
Sichuan Tengzhong Heavy Industrial Machines Co. said Wednesday it pulled out of the deal to buy the company from General Motors Co. Tengzhong failed to get clearance from Chinese regulators within the proposed timeframe for the sale, the Chinese manufacturer said… “We are disappointed that the deal with Tengzhong could not be completed,” said John Smith, GM vice president of corporate planning and alliances. “GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner.”
GM has been trying to sell the loss-making brand for the last year and signed a deal with Tengzhong in October. However, resistance from Chinese regulators, who have been putting the brakes on investment in the fast-growing Chinese auto industry, created difficulties from the start.
As recently as Tuesday, private investors were trying to set up an offshore entity in a last-minute effort to complete the acquisition ahead of a Feb. 28 deadline. That plan, along with other options, was unsuccessful, according to a person close to the situation. The person declined to be identified in order to speak more freely.
See also this past CDT post on the proposed sale.