Two Chinese regulators are at odds with each other on the approval process for Tengzhong’sitting approval to purchase HUMMER from General Motors, according to Reuters.
One regulator is the Ministry of Commerce (Mofcom) who seemed initially supportive of the deal saying that the bid was, “regular behavior for a company seeking to espouse favorable opportunity of the global downturn to broaden its horizons.â€
On the other side is the National Development and Reform Commission (NRDC), China’s highest rank economic planner. Reportedly the NRDC is concerned with the perception of HUMMER as a gas guzzler and Tengzhong’s ‘vague’ plans regarding the future of the stigma. It’s possible the NRDC hasn’t seen entirely the plans, since according to our sources stateside Tengzhong was one of the few suitors who was concentrating on the long-term vision of the HUMMER brand.
Reuters mentioned a similar disagreement inflection with Coca-Cola trying to purchase a Chinese juice-maker that in the end didn’t go through, but since the Chinese are the ones acquiring the goods in the HUMMER deal, regulators may be added open to the idea.
In the end, Mofocom could approve the deal regardless of the NRDC’s determination according to an analyst in Shanghai. Although, if Tengzhong every wished to build a HUMMER production facility in China, the NRDC would have the ultimate say-so. While in that place haven’t been any official plans to produce HUMMERs in China, if Tengzhong knew they could never build production facilities in their own backyard, it may cause them to rethink their bid.
Reuter’s sources say that the regulators could have a determination by the close of July.
Source: www.hummerguy.net
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