US: Wanxiang looks to end-January for A123 decision
Wanxiang says it expects a regulatory decision concerning its bid to purchase A123 systems early in the new year.
Chinese Wanxiang requires approval to buy A123 from the Committee on Foreign Investment in the United States (CFIUS), while at the same time, Johnson Controls has filed an appeal in the bankruptcy court of the 11 December, 2012 sale order.
As part of the sale order, the court ordered the escrow of the break-up fee and expense reimbursement that Johnson says is due to the company under its stalking horse agreement with A123.
"It [CFIUS] should be done up to the end of next month," a person close to the Wanxiang bid told just-auto. "We don't see any concern on the government side, but we respect their investigation, we hope can get final approval.
"A123 is a good company [with] good technology and results. They are in line with Wanxiang's strategy in renewable energy. Wanxiang invests in renewable energy, especially batteries, since 1999.
"We are becoming a major player of the power battery in China - we [have] kept developing the technology and business in China for more than ten years."
The source added Wanxiang was one of the largest non State-owned companies in China and that it had been in the US since 1994 with its headquarters in Illinois.
"We are part of the US economy," said the source. "In terms of the renewable energy business, batter [ies are] our main area."
Johnson Controls said should the sale of A123 Systems to Wanxiang not be completed for any reason, it remained "open to considering future opportunities to acquire relevant portions of A123's assets, keeping this critically important technology in the US, preserving jobs and furthering the purpose of the American Reinvestment and Recovery Act," according to Johnson Controls Power Solutions president, Alex Molinaroli.
The component supplier declined to match a higher bid for A123 put forward by Wanxiang.
A123 selected Wanxiang's bid of US$257m against a set of competing complementary bids by Johnson Controls for the automotive and government assets and NEC for the grid and commercial assets.
CFIUS is an inter-agency committee authorised to review transactions that could result in control of a US business by a foreign person in order to determine the effect of such transactions on what it describes as "national security."