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Wanxiang Group Wins Auction for Battery Maker A123
Wanxiang Group has agreed to pay $257 million for most of the assets of bankrupt lithium-ion battery maker A123 Systems Inc.
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Wanxiang Group has agreed to pay $257 million for most of the assets of bankrupt lithium-ion battery maker A123 Systems Inc.
The offer from the Chinese company's Wanxiang America unit topped those of such other bidders as Milwaukee-based Johnson Controls Inc. and Japan's NEC Corp. at a court-supervised auction late last week.
The company will seek the approval of a federal bankruptcy judge at a hearing on Tuesday.
Waltham, Mass.-based A123 filed for Chapter 11 protection on Oct. 16 after a deal to sell an 80% stake to Wanxiang for as much as $465 million collapsed, reportedly because of U.S. government opposition.
The new proposed sale includes A123's automotive unit (which supplies batteries for electric and hybrid vehicles), its electric grid operations and a Chinese joint venture with Shanghai Automotive Industry Corp.
But the deal excludes A123's government business, which has sensitive technology contracts with the U.S. military. Woodridge, Ill.-based Navitas Systems has agreed to buy the military unit for $2 million, thus deflecting much of the Congressional concern about the risk of transferring government secrets to China.
The sale will still need the approval of the U.S. Committee on Foreign Investment, a panel of nine federal agencies that scrutinizes deals that could affect national security.
The Dept. of Justice also has claimed veto rights on any sale to protect the American government's interests. A123 received a $249 million U.S. Dept. of Energy grant in 2009.
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