General Motors looks set to sell Hummer to a Chinese company.
The manufacturer has struck a tentative deal to sell the brand to Sichuan Tengzhong, which makes heavy industrial machinery, reports The Guardian.
A day after filing for Chapter 11 bankruptcy protection to shield itself from £105 billion in debts, GM signed a memorandum of understanding with the firm.
According to The Guardian a source close to the negotiations said Sichuan Tengzhong would pay between £150 and 250 million for Hummer.
The Chinese company wants to expand the brand globally and develop more fuel efficient models.
The sale of the iconic American SUV brand is part of GM’s ongoing restructuring plans following its enter into Chapter 11 bankruptcy this week.
The sale is expected to close by the end of Q3 this year but is still subject to regulatory approvals.
As part of the proposed transaction, Hummer will continue to contract vehicle manufacturing and business services from GM during a defined transitional time period. Under the proposed agreement, GM will continue to assemble the H3 and H3T through to at least 2010.