Chinese Company to buy Hummer brand from GM
- Thread starter bd popeye
- Start date
it makes you wonder what the hell those guys were thinking LOL.
i guess Tongzhen or whatever the company's name is wants to compete with whoever is building that Chinese hummer. or that they are after some kind of technology that their Chinese counterpart wouldnt offer them. maybe it has something to do with the streamline...who knows,they must be after something that they think is gonna give them an edge over that Chinese hummer producer,but its definitely not the market LMAO
i guess Tongzhen or whatever the company's name is wants to compete with whoever is building that Chinese hummer. or that they are after some kind of technology that their Chinese counterpart wouldnt offer them. maybe it has something to do with the streamline...who knows,they must be after something that they think is gonna give them an edge over that Chinese hummer producer,but its definitely not the market LMAO
lol just read about an interesting twist to this story just now. apparently the department of commerce (the Chinese side) already made it clear to the Tengzhong that they would not allow this transaction to go through. so if Tengzhong knows this ahead of time but still goes with it, its possible that they are just getting a free advertisement.
actually Chinese companies should just focus on improving their productivity and product quality. Japanese firms use to go around buying american assets during the 80s, that didnt end up being much of a help when their own system failed them, they ended up selling some of those assets back to the americans or to someone else for cheaper than when they bought them.
bladerunner
Banned Idiot
IMO Saab would be a bad buy and their models a big ?? More experienced owners of Saab have found it very hard to make a go of it.
Hummer buy seen a rocky road for obscure China firm
By Kirby Chien and Samuel Shen
BEIJING/SHANGHAI (Reuters) - A little-known Chinese heavy machinery maker could face a bumpy road ahead in its quest to buy General Motors' Hummer brand, facing pitfalls ranging from regulatory to financing issues.
Just three days after Sichuan Tengzhong Heavy Industrial Machinery and GM announced their surprise deal, analysts and Chinese media were buzzing with talk that the two companies may have jumped the gun.
Tengzhong was in advanced talks with banks, a spokeswoman from Tengzhong, told Reuters.
"However, as you would appreciate, the funding can't be finalized prior to a definitive agreement being signed," she said.
GM said on Tuesday that it did not expect any regulatory scrutiny from the United States government on the deal with Tengzhong.
But many China watchers say that resistance could actually come from China itself, as Beijing pushes for development of more energy-efficient technologies that go contrary to Hummer's line-up of big, gas-guzzling vehicles.
As the world's second-largest energy user, China is trying to encourage its citizens and industry to be more fuel efficient to lower its energy bill and improve its environment.
The Hummer deal may not get government approval as Beijing is not encouraging its automakers to make acquisitions overseas, the official Shanghai Securities News reported, citing people with knowledge of the matter.
"Some people may have views and speculation but the Chinese government has a process that we respect," the Tengzhong official said. "We have only just signed an MOU (memorandum of understanding), but as we develop our proposals with GM and Hummer we will continue to work with the appropriate authorities."
FACING HURDLES
Some analysts said Chinese leaders may also be reluctant to let a company with no experience running an overseas operation take on such a high profile and risky acquisition.
"Obviously, Tengzhong is not a well-established company, and its business doesn't fit well with Hummer, so the deal looks tricky," said Jeffery Wang, Shanghai-based managing director of investment bank Business Development Asia.
"Apart from that, buying Hummer should be a poor business decision in the long run, as ... I don't think Tengzhong has the ability or resources to turn the business around. ... I don't think any banks would be willing to fund the acquisition by a company without a solid background."
Little is know about Tengzhong. Based in the Chinese province of Sichuan, it makes special-use vehicles, highway and bridge structural components, construction machinery and energy equipment. Tengzhong was formed in 2005 through a series of mergers and, according to its website has 4,800 employees.
Another source familiar with the deal said it still faces many hurdles.
"There's still a lot of wood to chop on this deal," said the source, commenting on condition that his name not be used due to the sensitivity of the deal.
"It's funny how things change so much in a year. A year ago, Capitol Hill would have had all sorts of scrutiny for this deal. Now it's China who will give this deal scrutiny," said the source.
But one analyst pointed out that Beijing could still let the deal through from a regulatory perspective, as part of its increasing tendency to take a more hands-off approach to companies' overseas acquisitions.
"China has loosened control over outbound investments and has been encouraging private enterprises to make overseas acquisitions, so I don't see any major regulatory obstacles to the deal," said Alex Wang, a lawyer at Paul Hastings.
"The regulators' role is shifting toward market supervision, rather than making business decisions on behalf of companies," he said.
($=6.83 yuan)
By Kirby Chien and Samuel Shen
BEIJING/SHANGHAI (Reuters) - A little-known Chinese heavy machinery maker could face a bumpy road ahead in its quest to buy General Motors' Hummer brand, facing pitfalls ranging from regulatory to financing issues.
Just three days after Sichuan Tengzhong Heavy Industrial Machinery and GM announced their surprise deal, analysts and Chinese media were buzzing with talk that the two companies may have jumped the gun.
Tengzhong was in advanced talks with banks, a spokeswoman from Tengzhong, told Reuters.
"However, as you would appreciate, the funding can't be finalized prior to a definitive agreement being signed," she said.
GM said on Tuesday that it did not expect any regulatory scrutiny from the United States government on the deal with Tengzhong.
But many China watchers say that resistance could actually come from China itself, as Beijing pushes for development of more energy-efficient technologies that go contrary to Hummer's line-up of big, gas-guzzling vehicles.
As the world's second-largest energy user, China is trying to encourage its citizens and industry to be more fuel efficient to lower its energy bill and improve its environment.
The Hummer deal may not get government approval as Beijing is not encouraging its automakers to make acquisitions overseas, the official Shanghai Securities News reported, citing people with knowledge of the matter.
"Some people may have views and speculation but the Chinese government has a process that we respect," the Tengzhong official said. "We have only just signed an MOU (memorandum of understanding), but as we develop our proposals with GM and Hummer we will continue to work with the appropriate authorities."
FACING HURDLES
Some analysts said Chinese leaders may also be reluctant to let a company with no experience running an overseas operation take on such a high profile and risky acquisition.
"Obviously, Tengzhong is not a well-established company, and its business doesn't fit well with Hummer, so the deal looks tricky," said Jeffery Wang, Shanghai-based managing director of investment bank Business Development Asia.
"Apart from that, buying Hummer should be a poor business decision in the long run, as ... I don't think Tengzhong has the ability or resources to turn the business around. ... I don't think any banks would be willing to fund the acquisition by a company without a solid background."
Little is know about Tengzhong. Based in the Chinese province of Sichuan, it makes special-use vehicles, highway and bridge structural components, construction machinery and energy equipment. Tengzhong was formed in 2005 through a series of mergers and, according to its website has 4,800 employees.
Another source familiar with the deal said it still faces many hurdles.
"There's still a lot of wood to chop on this deal," said the source, commenting on condition that his name not be used due to the sensitivity of the deal.
"It's funny how things change so much in a year. A year ago, Capitol Hill would have had all sorts of scrutiny for this deal. Now it's China who will give this deal scrutiny," said the source.
But one analyst pointed out that Beijing could still let the deal through from a regulatory perspective, as part of its increasing tendency to take a more hands-off approach to companies' overseas acquisitions.
"China has loosened control over outbound investments and has been encouraging private enterprises to make overseas acquisitions, so I don't see any major regulatory obstacles to the deal," said Alex Wang, a lawyer at Paul Hastings.
"The regulators' role is shifting toward market supervision, rather than making business decisions on behalf of companies," he said.
($=6.83 yuan)
that's not big enough of a market. besides the Chinese government has regulations that favours hybrid right now.
US car giant Ford today confirmed that it is selling Volvo to the Chinese and that the deal, thought to be worth around $2bn (£1.25bn), should be signed early next year.
In a statement today the US automaker said that "all substantive commercial terms" relating to the sale of the loss-making Swedish firm have now been settled with with the buyer, Zhejiang Geely.
"While some work still remains to be completed before signing – including final documentation, financing and government approvals – Ford and Geely anticipate that a definitive sale agreement will be signed in the first quarter of 2010, with closing of the sale likely to occur in the second quarter 2010, subject to appropriate regulatory approvals," Ford said.
Ford has been trying to offload the loss-making Volvo, maker of the so-called "Swedish tanks", for a year and in October chose a consortium led by the Geely industrial group as preferred bidder. Geely is China's largest independent motor manufacturer.
It said the deal will ensure that Volvo has the resources needed to further strengthen its business and build its global franchise, leaving Ford free to focus on its core business.
While Ford said it would continue to cooperate with Volvo in several areas after the sale, it has no plans to retain a stake in the business. More details of the deal will given once the definitive sale agreement is signed in the first quarter of 2010.
No price has been disclosed for the sale but industry sources suggest around $2bn. This is well below the $6.45bn Ford paid for the business in 1999. It will be the largest overseas acquisition by a Chinese car manufacturer, topping the recent purchase by Beijing Automotive Industry of assets from General Motors' Saab business.
Volvo, which takes its name from the Latin verb "volvere", meaning "to roll", was founded in Gothenburg in 1927, some 20 years earlier than rival Saab. It employs around 20,000 people, three quarters of whom work in Sweden. Volvo outsold Saab four-to-one last year, with sales of around 375,000 vehicles, but lost $231m (£140m) in the second quarter of 2009. Sales of its vehicles have fallen 22% in the US this year.
News on the Volvo sale comes amid continuing uncertainty over the future of Saab, the struggling 62-year old Swedish carmaker. The Swedish government has warned there is only a "very, very slim" hope of saving the carmaker, which employs 3,400 people, despite interest shown by the Dutch firm, Spyker Cars. Spyker has given Saab's owner, General Motors, more time to consider an offer for the marque.
Unions and government officials have held emergency talks in Saab's manufacturing hub of Trollhatten and unions in Sweden have written an open letter to GM's board demanding it takes offers for the business more seriously.
Sweden's government has provided emergency aid to Volvo and Saab to keep them afloat although it has been reluctant to take public ownership of its carmakers.
In a statement today the US automaker said that "all substantive commercial terms" relating to the sale of the loss-making Swedish firm have now been settled with with the buyer, Zhejiang Geely.
"While some work still remains to be completed before signing – including final documentation, financing and government approvals – Ford and Geely anticipate that a definitive sale agreement will be signed in the first quarter of 2010, with closing of the sale likely to occur in the second quarter 2010, subject to appropriate regulatory approvals," Ford said.
Ford has been trying to offload the loss-making Volvo, maker of the so-called "Swedish tanks", for a year and in October chose a consortium led by the Geely industrial group as preferred bidder. Geely is China's largest independent motor manufacturer.
It said the deal will ensure that Volvo has the resources needed to further strengthen its business and build its global franchise, leaving Ford free to focus on its core business.
While Ford said it would continue to cooperate with Volvo in several areas after the sale, it has no plans to retain a stake in the business. More details of the deal will given once the definitive sale agreement is signed in the first quarter of 2010.
No price has been disclosed for the sale but industry sources suggest around $2bn. This is well below the $6.45bn Ford paid for the business in 1999. It will be the largest overseas acquisition by a Chinese car manufacturer, topping the recent purchase by Beijing Automotive Industry of assets from General Motors' Saab business.
Volvo, which takes its name from the Latin verb "volvere", meaning "to roll", was founded in Gothenburg in 1927, some 20 years earlier than rival Saab. It employs around 20,000 people, three quarters of whom work in Sweden. Volvo outsold Saab four-to-one last year, with sales of around 375,000 vehicles, but lost $231m (£140m) in the second quarter of 2009. Sales of its vehicles have fallen 22% in the US this year.
News on the Volvo sale comes amid continuing uncertainty over the future of Saab, the struggling 62-year old Swedish carmaker. The Swedish government has warned there is only a "very, very slim" hope of saving the carmaker, which employs 3,400 people, despite interest shown by the Dutch firm, Spyker Cars. Spyker has given Saab's owner, General Motors, more time to consider an offer for the marque.
Unions and government officials have held emergency talks in Saab's manufacturing hub of Trollhatten and unions in Sweden have written an open letter to GM's board demanding it takes offers for the business more seriously.
Sweden's government has provided emergency aid to Volvo and Saab to keep them afloat although it has been reluctant to take public ownership of its carmakers.