Wanxiang Group, China’s largest maker of auto parts won the auction for A123 Systems, Reuters says. The maker of batteries for electric cars was funded partly with U.S. government money, but went bankrupt nonetheless.
Investment banker Lazard Freres told Reuters that Wanxiang’s bid of about $260 million was better than a joint bid of Johnson Controls and Japan’s NEC.
Wanxiang supplies auto parts to many of China’s largest automakers. Wanxiang generates about $1 billion in revenue in the United States by supplying parts to GM and Ford Motor Co and has bought or invested in more than 20 U.S. companies, many of them in bankruptcy.
The sale must be approved by Delaware Bankruptcy Court judge Kevin Carey at a hearing scheduled for Tuesday. It also needs the approval of the Committee on Foreign Investment in the United States.
A213 also supplies the U.S. military, and there is opposition to a Chinese company having access to sensitive technologies being used the U.S. military.
However, the part of A123’s business that works with the U.S. Defense Department went to another unidentified bidder, a source told Reuters.
Quite interestingly, the $260 million are just a little more than the $249 million grant A123 has received from the U.S. government. It is not clear whether the grant can be transferred to a new owner. Even more interestingly, A123 can still draw $120 million under various government grants, court records say.
A123 supplies batteries to Fisker. Fisker stopped production saying it needs to wait until the new owner of A123 has been determined.