Hummer deal between GM and Tengzhong comes to formal agreement

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General Motors and Sichuan Tengzhong Heavy Industrial Machinery have settled on a deal to sell GM's iconic Hummer brand. It is the first time Chinese investors have stepped in as buyers in the US auto industry.

Sichuan Tengzhong will acquire Hummer through an investment partnership under the deal. Tengzhong will hold 80 percent of the investment firm. It will also assume ownership of the Hummer brand. Hummer's current management team will continue to run the company.

Yang Yi, CEO of Sichuan Tengzhong Heavy Industrial Machinery, said, "After a number of mergers and acquisitions, Tengzhong has integrated various resources and experience from different sectors. I want to emphasize, we do not plan to interfere with Hummer's operation. We are confident in Hummer's current management team."

Yang says Hummer's most important market remains in the US, where its long-term production headquarters will remain. But he didn't rule out the possibility of building a Chinese Hummer plant to capitalize on the country's growing economy. Tengzhong will also explore other emerging markets in the world. It will invest in research and development to make Hummer a greener vehicle.

The deal still hinges on approval from the Chinese and US governments. The Commerce Ministry said they haven't received any submissions relating to the Hummer sale yet.