Wanxiang outbids JCI for most of A123's assets
Wanxiang Group Co., China's biggest automotive supplier, agreed to buy most of electric car battery maker A123 Systems Inc. for $257 million (1.6 billion yuan), outbidding Johnson Controls Inc. in a U.S. bankruptcy auction.
The agreement is for A123's automotive, grid and commercial business, though it excludes the Waltham, Mass., company's military contracts, A123 said in a statement.
The accord is subject to court approval on Tuesday, it said. Johnson Controls said it declined to match Wanxiang's offer, though the deal is still subject to review from the Committee on Foreign Investment in the U.S. Congress.
Wanxiang is seeking A123's battery technology, used in Fisker Automotive Inc.'s Karma sedan, as China pushes its companies to develop electric vehicles. An earlier accord with the Chinese company was scrapped in October, when A123 said it filed for bankruptcy protection and agreed to sell its automotive assets to Johnson Controls.
Military contracts
A123 supplies electric-car batteries to a dozen customers, according to Bloomberg New Energy Finance estimates. That's the highest number of clients in the industry, though LG Chem Ltd. and NEC Corp.'s venture with Leaf-maker Nissan Motor Co. have higher volume sales, said Shu Sun, a Beijing-based analyst at Bloomberg New Energy Finance.
The auction results also pave the way for Wanxiang, of Hangzhou, to receive A123's cathode powder plant in China and its share of a joint venture with Shanghai Automotive Industry Corp. called Shanghai Advanced Traction Battery Systems Co., according to the statement.
Navitas Systems, a Woodridge, Ill., company, will buy A123's Ann Arbor, Mich., government business for $2.3 million, according to the statement.
A123, the recipient of a $249 million federal grant, held the auction behind closed doors in the Chicago law offices of Latham & Watkins. The auction began on Thursday with prospective bidders including Johnson Controls, Wanxiang, Siemens AG of Germany and NEC Corp. of Tokyo.
Court hearing
The company will seek court approval to sell the assets from U.S. Bankruptcy Judge Kevin Carey at a Tuesday hearing in Wilmington, Del.
Wanxiang, whose businesses range from auto parts to fishery and beverages, has been pursuing approval from the Committee on Foreign Investment in the U.S. Congress, a multiagency group led by the Treasury Department that reviews mergers and acquisitions for national-security concerns when a takeover may give a foreign owner control of a U.S. company.
The sale of A123's assets is subject to Committee on Foreign Investment in the U.S. Congress review and approval from the U.S. government, Johnson Controls said in a statement Sunday.
In its previous agreement announced in August, Wanxiang agreed to offer as much as $465 million in financing in exchange for securities convertible into a stake of as much as 80 percent of A123.
Fisker, A123's main customer, had been awaiting the sale of the company's Michigan plant so it could resume production of the $103,000 plug-in Karma sedan.
Bankruptcy filing
A123 filed for bankruptcy in October after the Wanxiang deal was scuttled amid congressional Republicans' reluctance to allow the sale of the government-funded company to a Chinese company.
A123's automotive business includes facilities in Livonia and Romulus, Mich. A123 used $132 million of the grant toward building the two Michigan factories.
The grid business focuses on energy generation, transmission and distribution while the commercial division develops products for industries such as telecommunications, industrial robotics and power tools, according to court papers.
A123 works with the government on portable power solutions, unmanned aerial vehicles, pulsed power weapons as well as small energy cells for remote devices.
A123 listed assets of $460 million and debt of $376 million as of Aug. 31 in court documents.
The accord is subject to court approval on Tuesday, it said. Johnson Controls said it declined to match Wanxiang's offer, though the deal is still subject to review from the Committee on Foreign Investment in the U.S. Congress.
Wanxiang is seeking A123's battery technology, used in Fisker Automotive Inc.'s Karma sedan, as China pushes its companies to develop electric vehicles. An earlier accord with the Chinese company was scrapped in October, when A123 said it filed for bankruptcy protection and agreed to sell its automotive assets to Johnson Controls.
Military contracts
A123 supplies electric-car batteries to a dozen customers, according to Bloomberg New Energy Finance estimates. That's the highest number of clients in the industry, though LG Chem Ltd. and NEC Corp.'s venture with Leaf-maker Nissan Motor Co. have higher volume sales, said Shu Sun, a Beijing-based analyst at Bloomberg New Energy Finance.
The auction results also pave the way for Wanxiang, of Hangzhou, to receive A123's cathode powder plant in China and its share of a joint venture with Shanghai Automotive Industry Corp. called Shanghai Advanced Traction Battery Systems Co., according to the statement.
Navitas Systems, a Woodridge, Ill., company, will buy A123's Ann Arbor, Mich., government business for $2.3 million, according to the statement.
A123, the recipient of a $249 million federal grant, held the auction behind closed doors in the Chicago law offices of Latham & Watkins. The auction began on Thursday with prospective bidders including Johnson Controls, Wanxiang, Siemens AG of Germany and NEC Corp. of Tokyo.
Court hearing
The company will seek court approval to sell the assets from U.S. Bankruptcy Judge Kevin Carey at a Tuesday hearing in Wilmington, Del.
Wanxiang, whose businesses range from auto parts to fishery and beverages, has been pursuing approval from the Committee on Foreign Investment in the U.S. Congress, a multiagency group led by the Treasury Department that reviews mergers and acquisitions for national-security concerns when a takeover may give a foreign owner control of a U.S. company.
The sale of A123's assets is subject to Committee on Foreign Investment in the U.S. Congress review and approval from the U.S. government, Johnson Controls said in a statement Sunday.
In its previous agreement announced in August, Wanxiang agreed to offer as much as $465 million in financing in exchange for securities convertible into a stake of as much as 80 percent of A123.
Fisker, A123's main customer, had been awaiting the sale of the company's Michigan plant so it could resume production of the $103,000 plug-in Karma sedan.
Bankruptcy filing
A123 filed for bankruptcy in October after the Wanxiang deal was scuttled amid congressional Republicans' reluctance to allow the sale of the government-funded company to a Chinese company.
A123's automotive business includes facilities in Livonia and Romulus, Mich. A123 used $132 million of the grant toward building the two Michigan factories.
The grid business focuses on energy generation, transmission and distribution while the commercial division develops products for industries such as telecommunications, industrial robotics and power tools, according to court papers.
A123 works with the government on portable power solutions, unmanned aerial vehicles, pulsed power weapons as well as small energy cells for remote devices.
A123 listed assets of $460 million and debt of $376 million as of Aug. 31 in court documents.
