General Motors Co. has confirmed that it has signed a definitive agreement, under which it will sell its Hummer sport utility brand to the Chinese heavy-equipment maker Sichuan Tengzhong Heavy Industrial Machinery Co.

Sichuan Tengzhong would acquire Hummer via an investment entity, in which it would hold an 80% stake. The remaining 20% would be held by Suolang Duoji, a private entrepreneur. Holdings of Duoji include Lumena Resources Corp. in Hong Kong.

It has appeared that production for Sichuan Tengzhong will continue from U. S. assembly plants until at least June 2011.

As of now, the terms of the deal are not known; however, if reports published in China are to be believed, a sum of $150 million would be paid by Tengzhong for Hummer. The deal has appeared after lengthy talks that were first disclosed in June, when GM and Tengzhong said they had reached a preliminary agreement.

However, GM, after its deal to sell its Saturn unit to a U. S. auto dealership chain fell through last week, has learned that signing an agreement is no guarantee a transaction will be completed.

Analyst Rebecca Lindland of IHS Global Insight, expressed, "In the auto industry that we're in today, nothing is final until it's final. Whether it's Saturn or this deal, the risk is always there that it will fall through."

Nonetheless, the Hummer deal will help GM achieve a significant objective in its post-bankruptcy makeover - that of focusing on four main auto brands: Chevrolet, Buick, GMC and Cadillac. GM is negotiating the sale of its Sweden-based Saab unit and is closing its Pontiac division.

"It also will shut down Saturn now that the deal to sell it to Penske Automotive Group Inc. is dead. About 3,000 jobs in the U. S. are tied to building and selling Hummer vehicles. Under terms of the deal, assembly plants in Louisiana and Indiana would continue to produce Hummers under contract for Tengzhong until June 2011, with an optional one-year extension until June 2012," said a source.

Regulatory approval is necessary for the deal from the U. S. and Chinese governments. It will be late this year or early next year when the transaction might close.