Forging a cross-border buyout deal is always difficult. But, it is even more complicated if the seller needs to get the deal done fairly quickly.
No doubt, this is the case with GM, which is in the process of unloading its Hummer unit. The interested buyer is Sichuan Tengzhong, which is based in China. The price tag on the deal: $500 million.
However, this week we got a bombshell; that is, the BBC reported that the Chinese government wanted to kill the deal.
Yes, when dealing in China, the government can be a wild card. But it's also the case that reports can prove false. In fact, they could be a way to help with posturing so as to get a better price.
Interestingly enough, today's Wall Street Journal (subscription required) has a report that confirms that the GM-Tengzhong is still on.
Something else: keep in mind that GM plans to shutdown its Hummer plan in Shreveport, La. In other words, what are the key assets for the company?
At the same time, the GM- Tengzhong is in the preliminary stage. There is no purchase agreement yet. Thus, expect some wrangling on the transaction.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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