We saw this coming: the assets of bankrupt U.S. battery manufacturer A123 – which entered into bankruptcy protection earlier this year – have been sold to Chinese auto parts conglomerate Wanxiang Group for $256.6 million.
The final sale is expected to be completed tomorrow, pending approval by the U.S. government — according to the Detroit Free Press, both the Committee for Foreign Investment and the Department of Energy need to sign off in the bankruptcy court proceedings. The former committee approves all sales of U.S. companies to foreign entities, while the latter is involved because of a 2009 loan made to develop green technology, similar to loans Ford and Tesla both received.
According to our report this past summer, Wanxiang had issued a memorandum of understand that, in acquiring A123, it would invest up to $450 million in the battery maker. Waxiang won the bid for A123 after offering bankruptcy financing, when Johnson Controls (the former front-runner to buy A123) declined to do so. Additionally, A123’s government business is being sold separately to Navitas Systems, which makes commercial and industrial energy storage systems.
A123 finally declared bankruptcy earlier this year, despite having a successful IPO in 2009. It hit rocky times this spring when it had to recall the lithium-ion battery packs in the Fisker Karma, which cost it roughly $66.8 million to do. Fisker was not the only automaker to strike a deal with A123 – General Motors also sourced the Massachusetts-based company for Spark EV batteries.
Once the sale of A123 passes its final regulatory hurdles, it is actually Wanxiang’s U.S. arm – Wanxiang America – that will take possession of the battery maker’s assets. The Freep indicates that Wanxiang will acquire all of A123’s “automotive, grid and commercial business assets, including all technology, products, customer contracts and U.S. facilities in Michigan, Massachusetts and Missouri. It will also get A123’s cathode powder manufacturing operations in China and its equity interest in Shanghai Advanced Traction Battery Systems Co., A123’s joint venture with Shanghai Automotive.”
Source: Detroit Free Press