Wanxiang America has secured the green light from US authorities to buy A123 Systems, although the military element of the business has been excluded. 

The Committee on Foreign Investment in the United States (CFIUS) approved the buy for all non-government assets of A123, featuring its automotive, grid and commercial business assets and including technology, products, customer contracts and US facilities in Michigan, Massachusetts and Missouri.

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Also in the deal are the manufacturing operations in China and its equity interest in Shanghai Advanced Traction Battery Systems, as well as A123’s joint venture with Shanghai Automotive.

Excluded from the acquisition is A123’s Ann Arbor, Michigan-based government business, including contracts with the US military.

“We are excited to add A123 Systems to our growing portfolio of companies as we continue to expand on our strategy of investing in the automotive and cleantech industries in the US,” said Wanxiang America, president, Pin Ni.

“A123 will continue to offer technology for vehicle electrification and grid-scale energy storage, manufacturing and systems engineering capabilities and an R&D team.”

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A123 Systems says it will use its capability to bring innovations at the chemistry, cell and system level to market, while also ramping up manufacturing at its facilities in Michigan and Massachusetts to meet demand from customers in three core business areas: transportation, electric grid and lead-acid replacement.

In addition, A123 will continue operating its existing manufacturing facilities in China.

A123 adds it will capitalise on increasing market opportunity for its technology in low-voltage applications, including start-stop microhybrid battery systems.

The company is also committed to continue previously announced customer agreements introducing next-generation vehicles to market, including the ActiveHybrid three and ActiveHybrid five HEVs from BMW, the Chevrolet Spark EV from General Motors, the Roewe 550 plug-in HEV and Roewe E50 EV from Shanghai Automotive, China’s largest automaker.

Electric Grid-A123 Systems will continue to focus on transformation of energy production and delivery through its energy storage solutions and services designed to improve the operational reliability, economic viability and efficiency of electric power grids.

A123 Systems will continue to service key customers by supplying lithium ion battery solutions.

Previous estimates had put the bid price at US$257m.