The fate and future of A123 is in the hands of the Chinese as Wanxiang Corporation’s bid for the company has been accepted. Johnson Controls had been bidding for the assets of the failing battery maker but withdrew at the end of December 2012.
The court has approved Wanxiang’s purchase offer pending approval from the US Committee of Foreign Investment. Its bid of US$256.6 million for the assets of the company was $5 million higher than Johnson Controls.
Although JCI was the initial bidder for the company’s assets, it declined to match the bid from the Chinese company saying it was beyond the value of the assets JCI sought to acquire.
The government business, including all military contracts, which formed part of A123’s portfolio, has been bought by Navitas Systems for US$2.3 million. Navitas is a US-based lithium battery manufacturer.
The bankruptcy procedure included an appeal filed by Johnson Controls on the ground that it is entitled to receive a breakup fee that had previously been approved.
A123 creditors committee were not happy with this claim on the grounds that JCI was attempting to stop the sale to Wanxiang. The court is conditionally holding the fee while the appeal goes ahead.
Concerns have been raised by JCI, and two state senators regarding a non-US company having access to and control of an American company that has been heavily invested in by US tax payers.
Approval by the US Committee for foreign investment will be by way of a review of national security as affected by the foreign purchase. It is unknown how long this process may take.
See Winter 2013 BEST for the full story
