Tengzhong May Finalize Hummer Deal Friday: Source

SHANGHAI (Reuters) - China's Tengzhong may finalize a deal to buy General Motors Co's Hummer business for about $150 million on Friday, a source familiar with the deal said, China's biggest brand grab since Lenovo bought IBM's PC unit in 2005.

A completed deal would also mark the first major acquisition of distressed U.S. auto assets in the global downturn by Chinese firms seeking to acquire high-profile names and Western technology.

"GM and Tengzhong may close the deal as early as today," the source with knowledge of the talks told Reuters. GM declined to comment and Tengzhong could not be reached immediately for comment.

The Hummer sale is part of a drastic restructuring plan by the Detroit auto maker, which also involves the disposal of its Saab, Opel and Saturn operations as part of a government-sponsored bankruptcy recovery plan.

Sichuan Tengzhong Heavy Industrial Machinery, a little known heavy machinery maker, has been in detailed negotiations with GM since it announced an initial plan in June to acquire the rights to the premium off-road Hummer brand from its U.S. owner.

Tengzhong still needs approval from the Chinese government, including the Ministry of Commerce, which industry and government officials say holds the ultimate authority over the deal.

"I think the Tengzhong-Hummer deal is very likely to go through as commerce ministry officials had said repeatedly that overseas acquisitions would be rational behavior amid the global financial crisis," said Yi Junfeng, an analyst with Changjiang Securities.

AUTOS GO WEST

Many of China's fledgling automakers, including Geely Automobile Holdings <0175.HK>, are keen to establish a global profile and secure quick access to technology, and are taking a look at established global brands put up for sale by industry giants struggling to survive the recent slump.

They have often confronted obstacles to buying nationally prominent overseas names, however, with media reporting of opposition in Sweden to a sale of Ford Motor's Volvo car unit to the Chinese. Geely had in September confirmed its interest in the Swedish brand.