China firm to buy A123 despite tech transfer fears

The sale of the lithium-ion battery maker to a U.S. unit of Wanxiang Group was approved by a U.S. government committee on foreign investment, according to a statement from the Chinese company. The companies later said the deal had been completed.

Last month, Wanxiang's U.S. unit agreed to pay US$257 million for A123's automotive battery business and related assets in a bankruptcy auction, beating U.S. rival Johnson Controls Inc. of Milwaukee.

But the transaction still needed approval by the Committee on Foreign Investment in the United States, a government body led by the Treasury secretary. The committee approved the deal on Monday night, according to Wanxiang.

“Wanxiang America looks forward to closing the transaction and to continuing to foster the technologies A123 has worked so hard to develop,” said Pin Ni, the president of Wanxiang America Corp., in a statement.

Jason Forcier, president of the newly formed A123 Systems LLC's auto business, said Wanxiang was focused on pushing A123 to profitability within a few years. “Wanxiang obviously brings financial stability to the company that we haven't had in at least the last six to 12 months,” he said in a telephone interview.

Some members of Congress and the Strategic Materials Advisory Council — a group including retired military leaders that is focused on protecting the U.S. industrial supply chain — said the sale to Wanxiang could jeopardize U.S. energy security and they asked the U.S. committee to block it.

A123 had received a US$249 million grant from the U.S. government as part of a stimulus program to promote clean energy, although about half of that money was never released.

The company filed for bankruptcy in October due to weaker-than-expected demand for hybrid vehicles and technical problems.

The company makes batteries for Fisker Automotive, BMW hybrid 3- and 5-Series cars, and General Motors Co.'s all-electric Chevrolet Spark, which is scheduled for release later this year. China's SAIC Motor Corp. and India's Tata Motors also are customers.

The money raised by the sale will be used to repay the battery maker's debts of about US$376 million.

Wanxiang tried to blunt criticism of the deal by excluding A123's defense contracts from its bid at the auction. Those were sold separately to Illinois-based Navitas Systems for US$2.25 million.

1|2|Next Page>>

SHARE CLOSE
Blogger		Google+
Live Journal		Plurk
Stumble Upon

Tweet

	PREVIOUS ARTICLE
	Ford shares fall as Q4 profit eclipsed by Europe

NEXT ARTICLE
Los Angeles official seeks to shut down hotels for maternity tourists

Write a Comment

Terms

Enter your comments - 3000 characters max

Type in image code

 Receive China Post promos
 Respond to this email

Submit