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Ministry denies rejecting Tengzhong's Hummer deal

By George Gao  From Gasgoo.comFebruary 24, 2010

Shanghai, February 24 (Gasgoo.com) Wang Chao, an assistant commerce minister of China, reiterated at a briefing today that the ministry had yet to receive Sichuan Tengzhong's official application for the Hummer deal, and any reports that the agency had rejected the bid were untrue, Dow Jones reported.

Earlier today, Reuters reported that China has rejected a bid by obscure equipment manufacturer Tengzhong to buy GM's money-losing Hummer brand, dealing a possible death blow to the controversial deal. The Reuters report didn't specify which government department had rejected the deal.

Speaking at a regular press briefing, Wang reiterated the commerce ministry hasn't received Tengzhong's official application for the deal. Wang said he doesn't know if other government ministries have received an application from the Chinese company.

"The Chinese government supports companies' overseas investment, but requests them to carry out cooperation based on market rules," Wang said. The commerce ministry last year also expressed support for this deal "as a way for a Chinese company to go global."

A source told Reuters today that even if the government had rejected the deal, Tengzhong and GM were still looking at alternatives. Media said yesterday that Tengzhong could use an offshore vehicle to acquire Hummer if they couldn't get regulatory approval.
 
GM and Tengzhong have been working to sew everything up on the SUV brand deal since it was first announced last October. Several different regulators of the Chinese government need to approve the deal before it can go through.


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