Paper Says Financier to Control Hummer Maker AM General

NEW YORK, Aug 10, 2004; Reuters reported that billionaire financier Ronald Perelman is close to entering a joint venture to give him operating control of AM General Corp., which makes the Humvee military vehicle and its civilian offshoot, the Hummer truck, the Wall Street Journal said on Tuesday.

The deal values AM General at about $935 million, the newspaper said, citing unnamed people familiar with the matter. Barring any last-minute hitches, the pact could be completed as early as Tuesday, it said, citing the people.

Lawyers on Monday were working on the venture between Perelman's MacAndrews & Forbes Holdings Inc. and Renco Group Inc., the private holding company that controls AM General, the newspaper said. Both firms are based in New York.

Renco is led by veteran dealmaker Ira Rennert, who took over South Bend, Indiana-based AM General for $133 million in 1992.

A Renco spokeswoman declined immediate comment. MacAndrews did not immediately return a call seeking comment.

Perelman, who also controls cosmetics giant Revlon Inc., would take control of AM General, whose roots date to 1903.

In 1971, the company became a unit of the now defunct American Motors Corp., maker of the iconic Pacer automobile, whose bulbous lines gave it the look of a spaceship or an upside-down bathtub.

In 1979, AM General began preliminary design work on the M998 Series High Mobility Multi-Purpose Wheeled Vehicle, or Humvee, a 1.25-ton truck intended to replace the M151 and other light tactical vehicles.

The U.S. Army in 1983 awarded AM General its first Humvee contract. Nine years later, AM General launched the Hummer, a civilian version of the Humvee, and in 1999 it acquired backing from General Motors Corp. .

GM now markets and distributes the gas-guzzling Hummers. Through July, GM had sold 15,332 of the vehicles in 2004, down 22 percent from 19,629 a year earlier.

Perelman is worth $3.8 billion, according to a Forbes magazine study this year. Rennert has built a mansion in Southampton, New York, on eastern Long Island, that is said to be double the size of the White House, and contain 29 bedrooms, 42 bathrooms and at least a 20-car garage, according to published reports.