Shearman & Sterling has advised Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd. (Tengzhong) in connection with the negotiations leading to the execution on October 9, 2009 of definitive agreements regarding the purchase by Tengzhong of the Hummer brand from General Motors (GM).
Under the terms of the definitive agreements, Tengzhong will acquire the ownership of the Hummer brand, trademark and trade names, as well as specific IP license rights necessary for the manufacture of Hummer vehicles and will also assume the existing dealer agreements relating to Hummer's dealership network. Hummer will contract vehicle manufacturing, key components and business services from GM during a defined transitional time period and the deal is expected to secure more than 3,000 jobs in the U.S. related to the sale and manufacturing of Hummer vehicles.
Tengzhong intends to purchase Hummer through an investment entity, in which it will hold an 80 percent stake. Mr. Suolang Duoji, a private entrepreneur with holdings that include the Hong Kong-listed thenardite producer Lumena, will hold the remaining 20 percent stake.
The transaction is subject to customary closing conditions and regulatory approvals and/or review by government agencies in the U.S. and China. The completion of the definitive agreement enables the companies to continue and further the overall regulatory review process.
Based in Sichuan Province, Tengzhong is one of China's major privately owned engineering companies and manufacturers of heavy machinery equipment with a presence in special-use vehicles, road and bridge construction equipment and construction and energy industry equipment.
The Shearman & Sterling team representing Tengzhong was led by partner Lee Edwards (Beijing–M&A) and included partner Paul Strecker (Hong Kong-M&A), associates Wayne Lee (Hong Kong-M&A), Li Chen (Beijing-M&A), Bei Ding (Beijing-M&A) and Gang Dong (Beijing-M&A). Other principal attorneys involved are partners Tina Patel (Menlo Park-Intellectual Property), Larry Crouch (Menlo Park-Tax) and Steve Hibbard (San Francisco–Litigation).