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