Sichuan Tengzhong might not get Hummer approval

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The recent drama involving Sichuan Tengzheng’s purchase of Hummer is still on going, some reports say that the deal will be sealed as early as June 28th in just two days time, but the below news really puts the dampers on any potential purchase:

From Reuters:

BEIJING, June 25 (Reuters) – China’s top economic planning agency is likely to reject Sichuan Tengzhong’s bid to buy the Hummer brand from bankrupt General Motors Corp (GM.N) (GMGMQ.PK), state radio reported on Thursday.

The planner, the National Development and Reform Commission (NDRC), is worried that Sichuan Tengzhong Heavy Industrial Machinery, which makes special-use vehicles and highway components, does not have the experience and resources to run the Hummer business, the report said.

Besides, Hummer, as an expensive, gas-guzzling sports utility vehicle, would not fit in with the government’s policy of encouraging energy-efficient vehicles, the radio said.

China has a complicated, fragmented system to regulate overseas investments. Many government bodies, including the NDRC, the Ministry of Commerce and the State Administration of Foreign Exchange, are involved.

To further regulate overseas acquisitions by Chinese firms, the NDRC issued an order last Friday requiring Chinese companies to report intended overseas acquisitions to Beijing before they sign any legally binding contracts. [ID:nPEK70599]

The Ministry of Commerce has sounded a more positive note about the proposed deal, saying that the bid is normal behaviour for a company seeking to take advantage of the global downturn.

Thanks to Funf for the tip!