Battery Maker A123 to be Absorbed by Chinese Wanxiang Group
Battery maker A123 Systems is one of the more important battery makers in the world, making electrical components for both the Fisker Karma and upcoming Chevrolet Spark EV that just debuted at the 2012 Los Angeles Auto Show. But it went bankrupt in the fall, now prompting its sale to the Wanxiang Group Corporation in the latest soap opera episode. Going for the sum of $256.6 million, A123 will be folded into Wanxiang's automotive parts division. All that's holding up the deal is the approval from the U.S. Committee for Foreign Investments to clear it in bankruptcy court.A123 was awarded a $249 million loan from the Department of Energy and spent about $133 million of it before filing for bankruptcy. Wanxiang will not be receiving the rest of the loan in the sale of A123. Initially, Johnson Controls was intending to purchase the bankrupt A123, but it then rescinded its offer after Wanxiang more than doubled its bid. By comparison, A123's government contractor subsidiary is being sold to Navitas Systems for just $2.25 million. "We think we have structured this transaction to address potential national security concerns expressed during the review of our previous investment agreement with Wanxiang announced in August, as well as to address concerns raised by the Department of Energy," said A123's CEO, Dave Vieau, in a statement. "We believe this transaction balances those risks with A123's obligation to act in the best interest of our creditors." In the deal, Wanxiang will be getting A123's automotive, grid technologies, contacts, U.S. facilities, cathode powder production facility, and A123's share of Shanghai Advanced Traction Battery Systems that it co-owns with Shanghai Automotive (SAIC). Currently, A123 Systems has approximately 2,000 workers in the U.S. Wanxiang America has about 3,000 and is one of the largest companies in China without state ownership. Sources: Detroit Free Press, Reuters
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