NEW YORK Wanxiang America Corp. will acquire nearly all
the assets of battery manufacturer A123 Systems Inc. for $256.6
million, with Johnson Controls Inc. (JCI) declining to match
The deal includes A123s automotive, grid and commercial
business assets, including all technology, products, customer
contracts and U.S. facilities in Michigan, Massachusetts and
Missouri; its cathode powder manufacturing operations in China;
and its equity interest in Shanghai Advanced Traction Battery
Systems Co., A123s joint venture with Shanghai
Automotive, Waltham, Mass.-based A123 said in a statement
Woodridge, Ill.-based Navitas Systems LLC has agreed to acquire
A123s government business, including all U.S. military
contracts, for $2.25 million, A123 said.
The deal was reached following an auction conducted under the
supervision of the U.S. Bankruptcy Court in Delaware.
A123 chief executive officer Dave Vieau said the deal was
structured 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.
We believe this transaction balances those risks with
A123s obligation to act in the best interest of our
creditors, Vieau said.
Last month, the Strategic Materials Advisory Council warned
that a sale to Wanxiang would make the U.S. dependent on
an unreliable foreign source for yet another critical defense
amm.com, Nov. 28
). Chicago-based Wanxiang America
is a subsidiary of China-based Wanxiang Group.
JCI said in a statement Sunday that it officially withdrew its
bid for A123s automotive assets after refusing to match
While A123s automotive and government assets were
complementary to Johnson Controls portfolio and aligned
with our long-term goals, Wanxiangs offer was beyond the
value of those assets to Johnson Controls, said Johnson
Controls Power Solutions president Alex Molinaroli.
Reports by other parties that our proposal involved an
elimination of jobs in Michigan are inaccurate.
Milwaukee-based JCI had originally tendered a $125-million
offer to acquire the automotive assets of A123 after the latter
company filed for Chapter 11 bankruptcy protection in October
amm.com, Oct. 18
A123 and Wanxiang will seek court approval of the sale at a
hearing Tuesday. The deal must also be approved by the
Committee on Foreign Investment in the United States.