Tengzhong's Hummer deal to be commercially judged

Shanghai, September 2 (Gasgoo.com) Chinese regulators could decide whether to approve Tengzhong's bid for General Motors' Hummer brand based on commercial, not political, factors, a think-tanker with one of the regulators said at the China Investment Summit on Aug. 31, Reuters reported.

Since early June when Chinese machinery maker Sichuan Tengzhong announced its plan to buy the Hummer brand, Tengzhong and GM have been pushing ahead with the deal, which must be approved by two key regulators -- the Ministry of Commerce, and the National Development and Reform Commission (NDRC), China's top economic planner.

Market share and technology should have been the two key considerations for Tengzhong when it put forth its proposal for Hummer, said Chen Dongqi, deputy director of the Academy of Macro-Economic Research under the NDRC. "My personal view is Tengzhong must study if Hummer is worth it," Chen said at the summit at the Reuters office in Beijing.

Chen said that in determining whether to approve acquisitions in general, the NDRC should consider factors involving both market benefits and national security. The NDRC was reportedly lukewarm on the deal shortly after it was announced, but may have adopted a more neutral stance since then.

Tengzhong, responding to reports last week that Chinese regulators had approved its bid, said it is still awaiting official word. The NDRC reportedly said it had yet to approve the deal. The commerce ministry is positive about Chinese companies "going global" by acquiring world-famous brands.

A source familiar with the deal said last week that the two sides could finalize terms of the Hummer acquisition this week. Some of the terms have been leaked online, such as Tengzhong will operate Hummer's business via an offshore company.