GM in talks on selling Hummer business

GM declined to comment. A spokesman for Deripaska could not be immediately reached.

Deripaska expressed interest in the brand and GM has responded, but no official discussions have taken place, the sources said.

The contact between Deripaska and GM comes after reports that the Russian billionaire had been in negotiations with the largest US automaker about its expansion plans for Russia.

One of the sources said Deripaska would like to get Canadian auto parts giant Magna International involved in Hummer production if he ends up buying the brand.

In September 2007, Deripaska acquired a 20% stake in Magna for $1.54 billion and has pledged to help the supplier expand in Russia, one of the world's fastest growing auto markets and one where the Hummer brand has a strong cachet.

GM, which has said it will try to raise up to $4 billion through asset sales, has hired Citibank to consider all strategic options for Hummer.

In fact, GM Chief Executive Rick Wagoner said on Wednesday there was “significant interest” in the automaker's planned sale of assets, but no deals were expected soon.

“Frankly, we are getting some significant interest in our asset sales, including Hummer, but probably it won't be concluded imminently,” Wagoner said at a news conference in Thailand.

Deripaska, who owns Russian automaker GAZ, had made a failed attempt at buying Chrysler last year. Media reports also said he had been interested in buying British brands Jaguar and Land Rover from Ford Motor Co.

Those brands were eventually sold to Indian automaker Tata Motors Ltd.

GM, which has lost more than $51 billion over the past three years, said in June it was reviewing the gas-guzzling Hummer, which has hurt its image at a time when consumers want better fuel efficiency.

Hummer's US sales fell 40% in the first half of the year.

GM has also had exploratory talks with Indian automaker Mahindra & Mahindra Ltd, whose interest in Hummer was muted because of its own plans to launch a truck and an SUV in the US market, sources told Reuters in July.

As high gas prices, a weak housing market and tight credit conditions have eaten into vehicle sales in North America, GM has been focusing on growing overseas.

A sale to Deripaska would make sense as GAZ seeks technology to upgrade its outdated product lines of Volga sedans and Gazelle delivery trucks while GM needs to sell poorly performing brands and raise capital.

And Hummer could be a trophy property for Deripaska, who also has the advantage of hailing from a country where oil is not a huge concern.

But the deal could face complications with US authorities: the Russian tycoon had his US visa revoked last year due to concerns he may have ties to organized crime.

For his part, Deripaska has consistently denied participating in any criminal activity.

Deripaska's interest also comes amid souring US-Russia relations over Russia's military action against Georgia. (Reuters)