A123 Has A New Owner, Chinese Auto Part Giant Wanxiang
Just over 100 days ago A123 went bankrupt, and now we can finally put to rest the ultimate fate of A123's assets, as Chinese auto part giant, Wanxiang has been cleared by the Committee on Foreign Investment to buyout the US battery maker.
The deal had been under the microscope by CFIUS after some members of Congress had some national security concerns over the arrangement.
In order to gain approval, the portion of A123's business that dealt with government defense contracts was excluded from Wanxiang's purchase, and was instead sold to Navitas Systems for $2.25 million. As part of that deal Navitas is giving 40 ex-A123 employees a job.
2014 Spark EV Will Now Have Battery Pack Supplied By Wanxiang
What does this takeover mean to the auto makers that had contracts out with A123?
For General Motors (with the upcoming Spark EV) and BMW (with the 3 and 5 series hybrids) it is good news, as Wanxiang is already a huge player in the US automotive industry, and has deep roots with Detroit auto, and will continue those relationships and commitments.
For Fisker, an originally discounted deal on battery packs and systems negotiated years ago when A123 was looking to establish itself, looks to be considered void under Chapter 11 rules. If Fisker plans on continued used of A123/Wianxiang batteries in their luxury Karma, they may have to return to the negotiating table, or find a new partner.
Pin Ni, president of U.S. unit Wanxiang America Corp, said on the final approval news for his company:
“We’re pleased the government has completed its review and provided us with the go-ahead to finalize this transaction. The future is bright for A123. It is a company with exceptional talent and potential, and Wanxiang America is committed to its long-term success and the continuance of its U.S. operations.”
About Wanxiang America Corporation (from their website):
Based outside of Chicago, Wanxiang America has been in the automotive, industrial and clean energy technology markets in the U.S. since 1994 and has a long and successful record of investing in and expanding U.S. manufacturing operations. Wanxiang America currently has more than 3,000 employees in the U.S.