June 3, 2009 (FinancialWire) — Chinese industrial machinery firm Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd has confirmed details of a proposed transaction under which Tengzhong, will acquire the rights to the General Motors’ (NYSE: GM) off-road Hummer brand, along with a senior management and operational team.

The privately-held Chinese company will also assume existing dealer agreements relating to Hummer’s dealership network. Tengzhong, as part of the transaction, plans to enter into a long-term contract assembly and key component and material supply agreement with GM.

In an earlier statement, GM said it expects the deal if successful to secure more than 3,000 U.S. jobs. Both companies said that the final terms of the deal are subject to further negotiations.

Based in the Chinese province of Sichuan, Tengzhong is a domestic manufacturer of road, construction and energy industry equipment. The company plans to expand into the premium off-road vehicle segment through the acquisition of Hummer.

Yang Yi, CEO of Tengzhong, said “The Hummer brand is synonymous with adventure, freedom and exhilaration, and we plan to continue that heritage by investing in the business, allowing Hummer to innovate and grow in exciting new ways under the leadership and continuity of its current management team.”

Yi said that Tengzhong will be investing in the Hummer brand and its research and development capabilities, “which will allow Hummer to better meet demand for new products such as more fuel-efficient vehicles in the U.S.”

Under the current deal, Hummer will continue to maintain its headquarters and operations in the U.S., and will continue to be managed by its existing leadership team. The team intends to expand Hummer’s dealer network worldwide, particularly into new and “underserved” markets such as China.

The transaction is scheduled to close in the third quarter of this year and is subject to customary closing conditions and regulatory approvals. Financial terms of the agreement were not disclosed.

Detroit-based General Motors, an automakers that was founded in 1908, filed for Chapter 11 bankruptcy protection on June 1. The company manufactures cars and trucks in 34 countries.

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