US: A123 to sell most assets to Wanxiang for $257m

By | 10 December 2012

Lithium iron battery producer, A123 Systems, says it has reached agreement for an asset purchase with Wanxiang America Corporation, through which Wanxiang would acquire substantially all of A123's assets for US$256.6m.

The agreement was reached following an auction carried out by the US Bankruptcy Court for the District of Delaware, while a hearing at which A123 and Wanxiang will seek the required Court approval of the sale is scheduled for tomorrow (11 December).

Wanxiang would acquire A123's automotive, grid and commercial business assets, including all technology, products, customer contracts and US facilities in Michigan, Massachusetts and Missouri, its cathode powder manufacturing operations in China and its equity interest in Shanghai Advanced Traction Battery Systems, A123's joint venture with Shanghai Automotive.

Excluded is A123's Ann Arbor, Michigan-based government business, including all US military contracts, which would be acquired for US$2.25m by Navitas Systems, a provider of energy-enabled system solutions and energy storage products for commercial, industrial and government agency customers.

"As we had hoped, the auction process for A123's assets was robust and competitive," said A123 CEO, Dave Vieau. "We are pleased with the result of the auction and believe the selected bids from Wanxiang and Navitas maximise the value of A123's assets for the benefit of our stakeholders.

"We expect the sale will be approved by the Court, at which time we plan to execute the separate asset purchase agreements with Wanxiang and Navitas. We think we have structured this transaction 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 A123's obligation to act in the best interest of our creditors."

Based in Chicago, Wanxiang America has been in the automotive and industrial markets in the US since 1994 and currently has more than 3,000 employees in the US. It is a subsidiary of Wanxiang Group, China's largest automotive components manufacturer and one of China's largest non-state-owned companies.

"We believe A123's industry-leading technology for vehicle electrification, grid energy storage and other industries complements Wanxiang's strong R&D and manufacturing capabilities, so we think adding A123 to our portfolio of businesses strongly aligns with our strategy of investing in the automotive and cleantech industries in the US," said Wanxiang America president, Pin Ni.

"We plan to build on the engineering and manufacturing capabilities A123 has established in the US and we are committed to making the long-term investments necessary for A123 to be successful."

Sectors: Components, Service suppliers/supply chain

Companies: Shanghai Automotive

View next/previous articles

Currently reading -

US: A123 to sell most assets to Wanxiang for $257m

There are currently no comments on this article

Be the first to comment on this article

Related sector research

Global market review of automotive battery technology - forecasts to 2027

This greatly expanded latest version of the popular just-auto report provides a comprehensive overview of the global automotive battery sector, major suppliers, top 14 markets, technology trends and m...

Read more about battery technologies

Related company research

Shanghai Automotive Industry Corporation - Mergers & Acquisitions (M&A), Partnerships & Alliances and Investment Report

Datamonitor's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organization to sustain its competitive advantage....

Shanghai Automotive Industry Corporation - Strategic SWOT Analysis Review

Shanghai Automotive Industry Corporation (SAIC) is a leading multi-brand Chinese automobile manufacturer. The company offers products under different brands which include SAIC PC, SVW, SGM, SAIC Iveco, Nanqi, HUIZHONG, SUNWIN and SGMW. Its key operat...

Global and China Automotive Safety System Industry Report, 2010-2011

This brand new publication looks at the global market for automotive safety systems but gives a strong focus on the Chinese market. All the main Chinese safety system manufacturers are profiled and there is a thorough analysis of their relationship w...

Related articles

CHINA: Volkswagen JV breaks ground for Changsha plant

Volkswagen's joint venture with Shanghai Automotive has broken ground for a 300,000-unit plant in Changsha in the province of Hunan, south-central China.

CHINA: General Motors wins $1.3bn Cadillac plant approval

General Motors which, through its local joint ventures, is the largest foreign automaker in China, announced it had won regulatory approval to build a new Cadillac factory to boost local sales.

INDIA: GM set to launch first locally-assembled Chinese minivan

One of China's most popular vehicles, the SGMW joint venture's Wuling Hong Guang, is about to go on sale in India as the locally assembled Chevrolet Enjoy.

Welcome to the home of automotive information, insight & intelligence

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page