US govt approves sale of A123 Systems to China's Wanxiang Group

The US government yesterday approved the sale of bankrupt automotive rechargeable battery maker A123 Systems to China's Wanxiang Group, despite some lawmakers opposing the deal on fears of a key American technology falling into Chinese hands.

The US Committee on Foreign Investment (Cfius) approved the deal to buy "substantially all" of the non-government business assets of the lithium-ion battery manufacturer by China's largest auto parts maker.

The deal does not include A123's business that deals with the US Defence Department, which was sold seperately to US-based Navitas Systems for $2.25 million.

In December 2012, Wanxiang Group, led by Chinese billionaire Lu Guanqiu, won an auction with a $256.6-million offer for bankrupt A123 Systems, outbidding a joint offer from Johnson Controls and Japan's NEC Corp. (See: Wanxiang Group gets control of bankrupt US lithium battery maker A123 Systems in $256-mn deal)

Under the deal, Wanxiang Group's US subsidiary Wanxiang America will get all of A123's technology, its manufacturing facilities in the US, its cathode powder manufacturing operations in China, and its contracts with utilities and automakers.

It will also get A123's equity interest in Shanghai Advanced Traction Battery Systems Co, A123's joint venture with Shanghai Automotive.