Wanxiang Gets Final Approval to Buy A123 Systems
China's Wanxiang Group this week received U.S. government approval to complete its $256.6 million purchase of A123 Systems, a manufacturer of lithium ion batteries for plug-in electric vehicles. A123 Systems makes batteries for Fisker Automotive, BMW hybrid 3- and 5-Series cars, and the Chevrolet Spark EV.
The decision on whether or not the Chinese firm would secure the deal was under scrutiny by the U.S. government, which feared that vital technology would be released to China. The deal did not include included A123 System's defense contract, as they were sold separately to U.S.-based Navitas Systems. A123 Systems was awarded a US government grant of $249 million to help with construction of lithium ion battery manufacturing facilities in the United States.
Automotive battery maker Johnson Controls was among the list of bidders trying to purchase A123 Systems.
A123 filed for bankruptcy protection in October, in part due to weak demand for plug-in vehicles. The company specifically pointed to its deal with Fisker Automotive as one of the primary reasons for its financial difficulties.
It's believed that the deal with Wanxiang was approved due to the firms long history of investing in U.S. companies, some of which were nearing bankruptcy. Additionally, Wanxiang supplies several US automakers with parts, including Ford and General Motors.
As a result of the Wanxiang-A123 deal, a new wholly owned subsidiary of Wanxiang America Corporation, to be named A123 Systems LLC, has been formed. Wanxiang acquired all non-government related assets of bankrupt A123 Systems. Included in the acquisition are A123’s automotive, grid and commercial assets, including technology, products, customer contracts and facilities in Michigan, Massachusetts and Missouri, and its manufacturing operations in China.
"We are excited to add A123 Systems to our growing portfolio of companies as we continue to expand on our strategy of investing in the automotive and clean tech industries in the U.S.," said Pin Ni, president of Wanxiang America. "A123 will continue to offer cutting-edge technology for vehicle electrification and grid-scale energy storage, strong manufacturing and systems engineering capabilities and a world-class R&D team."
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