While the world is still in shock from the bankruptcy of General Motors (GM) in the US, China's Sichuan Tengzhong Heavy Industrial Machinery has seized an opportunity to buy the Hummer brand and its management team from the troubled automaker.

Shearman & Sterling is acting as Tengzhong's international legal counsel, while Jun He is acting as the company's PRC counsel on its proposed acquisition of Hummer from GM.

"There has been many opportunities and will continue to be opportunities in the US for foreign acquirors that have cash to buy relatively good assets at good valuations," said Paul Strecker, partner of Shearman & Sterling in Hong Kong who is working on this transaction with other partners in the firm's Beijing and New York offices.

The firm is also advising a number of other Asia acquirors looking at buying distressed assets in the US. The majority of these acquirors are China or Hong Kong companies.

In addition to state-owned enterprises headquartered in Beijing and large private corporations based in the major economic hubs, mid-tier corporations are emerging as another source of opportunities for international firms.

 "China corporations in general, no matter where they are based, represent a good opportunity for international firms," Strecker said. "What's happening is that many mid-tier companies that have done well domestically in China are now looking to expand abroad. With strong buying power and a vision to go global, mid-tier acquirors represent a source of opportunities for international firms advising on cross-border transactions."

Under the agreement, Tengzhong will acquire the rights to the Hummer brand, along with a senior management and operational team.  As part of the deal Tengzhong will assume existing Hummer dealer agreements and is expected to sign a long-term contract assembly and component and material supply agreement with GM.  If the deal is successful, GM expects it to save more than 3,000 jobs.  The terms of the deal are subject to final negotiations.

In 2005, Nanjing Automobile, which has now merged with Shanghai Automotive, acquired MG Rover, a major British automaker that had filed for bankruptcy. Nanjing Automobile's in-house legal team, led by the general counsel at the time Wang Yaoping, worked closely with Herbert Smith's London office to close the deal.