General Motors and Chinese Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd announced on Friday that they have entered into a definitive agreement that will allow Tengzhong to acquire GM's premium all-terrain HUMMER brand.

Under the terms of the definitive agreement, Tengzhong will acquire the ownership of the HUMMER brand, trademark and tradenames, as well as specific IP license rights necessary for the manufacture of HUMMER vehicles. The Chinese company will also assume the existing dealer agreements relating to HUMMER's dealership network.

Tengzhong will purchase HUMMER through an investment entity, in which it will hold an 80 percent stake. Suolang Duoji, a private entrepreneur will hold the remaining 20 percent stake. Financial terms of the agreement were not disclosed.

The agreement does not mean that Tengzhong has managed to acquire the legend brand as the transaction is subject to customary closing conditions and regulatory approvals or review by government agencies in the U.S. and China.

Fritz Henderson, GM President and CEO, applauded the deal saying that "this agreement signifies another important milestone in writing the next chapter for both GM and HUMMER."

Yang Yi, chief executive officer of the buyer showed his confidence about this deal, claiming that he believes the " investment will be able to accelerate, particularly related to the creation of the next generation of more fuel-efficient vehicles to meet not only future regulations but also customer expectations."

HUMMER would contract vehicle manufacturing, key components and business services from GM during a defined transitional time period. GM's Shreveport assembly plant would continue to contract assemble the H3 and H3T and AM General's Mishawaka assembly plant will continue to assemble the H2. Both facilities will produce the specified vehicles until June 2011, with an optional one year extension until June 2012.

HUMMER will continue to be managed by members of its existing leadership team including James Taylor, who will remain in his current role as HUMMER's chief executive officer.