GM reaches deal to sell Hummer brand

Chinese company will acquire rights to build new vehicles

Hummer, the off-road vehicle that once epitomized America’s love for hulking trucks, is now in the hands of a Chinese heavy equipment maker.

General Motors Co. and Sichuan Tengzhong Heavy Industrial Machinery Corp. finally signed the much-anticipated deal for GM to sell the brand on Friday.

Tengzhong will get an 80 percent stake in the company, while Hong Kong investor Suolang Duoji, who indirectly owns a big stake in Tengzhong through an investment company, will get 20 percent. The investors will also get Hummer’s nationwide dealer network.

Financial terms were not disclosed, although a person briefed on the deal said the sale price was around $150 million. The person did not want to be identified because the terms were being kept private. GM’s bankruptcy filing last summer said that the brand with military roots could bring in $500 million or more.

Suolang Duoji also is the controlling shareholder and chairman of Lumena Resources Corp., a Hong Kong listed mining company.

GM and Tengzhong said in a statement that the transaction still must be approved by the U.S. and Chinese governments. Chinese regulators initially expressed reservations about Tengzhong’s ability to run such an enterprise.

Hummer, whose smallest model gets 16 miles per gallon (14.7 liters per 100 kilometers) in combined city and highway driving, sold well until the middle part of this decade when fuel prices began to rise. Sales peaked at 71,524 in 2006.

But only 8,193 Hummers have been sold in the U.S. through the first nine months of the year. That’s down 64 percent from a year earlier. And only 426 Hummers were sold nationwide last month, according to Autodata Corp.