Tengzhong confirms end of plan to buy US Hummer
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The potential Chinese buyer for the rugged brand Hummer of the U.S.-based General Motors announced Thursday through a press release that the deal had collapsed.
Brunswick Group told the media by e-mail about the decision by the Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd., in southwestern China's Sichuan province, to terminate its former plan to buy the U.S. off-road vehicle brand.
According to the email, the deal collapsed because the Sichuan company failed to acquire Chinese government approval for the deal within the time limit set by the two sides.
Zhao Tong, a senior company official with Brunswick Group told Xinhua that Tengzhong respected the result but was very regretful about failure to complete the deal.
However, the government side implied that it did not give the nod because Tengzhong did not hand in a complete purchase plan as required, which usually should include plans regarding enterprise structure, investment modes and a fund-raising program.
A spokesman with China's Ministry of Commerce (MOC) said Thursday that the ministry had not received any formal application from the Sichuan company regarding the Hummer deal.
The government could not yet make a decision as the enterprise did not come up with a complete purchase plan, MOC spokesman Yao Jian said at a press conference in Beijing.
The MOC had always encouraged enterprises to invest overseas, but if an enterprise could not submit a complete program within the proposed time frames, it might lead to contract failures, Yao said.
In October, Tengzhong agreed in principle to buy the brand, trademark, trade names and intellectual property license rights to build Hummer vehicles. The company also was going to assume existing dealer agreements.
