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JUNE 26, 2009, 133 P.M. ET
By JOHN D. STOLL

The potential buyer of General Motors Corp.'s Hummer division will kick off formal discussions with Chinese regulators next week in an effort to win approval for its acquisition of the brand, according to people familiar with the matter.

Sichuan Tengzhong Heavy Industrial Machinery, based in China, has tentatively agreed to buy Hummer from GM, but it first needs government approval.

On Friday, a China National Radio report stoked speculation that Chinese regulators will block the deal because of environmental concerns and the relative inexperience of Tengzhong as an auto maker. But according to the people familiar with the matter, GM and Tengzhong have yet to formally present the transaction to the regulators responsible for reviewing it. The parties negotiating the deal haven't been informed that the transaction is dead, and GM is still planning on winning approval for the sale, these people said.

One GM executive familiar with the matter said rumors that the deal would absolutely be blocked are "not true" and should be considered "pure speculation."

Tengzhong's discussions with Chinese regulators are expected to take several weeks and include presentations of plans and legal documentation. Executives from GM and Tengzhong met this week to firm up their plans, according to people familiar with the meeting, and they are operating under the assumption that they have a reasonable chance of getting the deal approved, even if the Chinese government harbors some concerns.

GM announced a tentative memorandum of understanding with Tengzhong shortly after filing for bankruptcy in early June but said at the time it still needed to win government approval and take several other steps to shore up the deal.

"There has been a fair amount of uninformed media conjecture regarding the potential sale of Hummer to Tengzhong," Hummer spokesman Nick Richards said. The view expressed on China National Radio's website did not quote or source anyone at [China's] National Development and Reform Commission."

Mr. Richards said "furthermore, the fact it is from an article from a state media organization does not mean it is government policy. The Chinese government has a process that we respect."

"We do not yet have a definitive agreement, but are developing our proposals and will continue to engage with the appropriate authorities in an appropriate manner."

The nightly news broadcast on state radio, at 630 p.m. local time, is among the more authoritative news outlets. But the Tengzhong information appears not to have come on that report and instead appeared on the state radio station's Web site, presented as a reporter's analysis.

Such reports on Chinese news Web sites, even of state media, often have proven not to represent any official position.

—Jason Dean contributed to this atricle.
http//online.wsj.com/article/SB124602866499960991.html
It must be noted that Indian automaker Mahindra & Mahindra had expressed interest in purchasing all or part of Hummer, since GM announced the possibility of selling Hummer last year.

But i still cant believe that Hummer would fall into Chinese hands. C'mon they produce military vehicles for the US armed forces!