Today, December 6th, we will find out if Johnson Controls or Wanxiang Group will be the company to own A123 Systems’ assets.
“With the bankruptcy of A123 Systems, Johnson Controls is one of the last standing American companies competing in and building this U.S. advanced battery industry,” the company said in a statement.
It will be a tough fight between the US and China, as the bidding begins at $125 million. Republican Senators John Thune and Chuck Grassley have expressed their concerns regarding this deal which implies selling technology to the Chinese rival company and therefore reaching the wrong hands.
“Bankruptcy judges are loathe to reject legitimate arms-length offers that will generate the maximum revenue for creditors and attorneys,” said John Pottow, a bankruptcy expert and professor at the University of Michigan Law School.
A123 Systems filed for bankruptcy in October, after it agreed to receive a bid of $125 million for its automotive business from Johnson Controls. This initial bid was meant to encourage other companies to come forward, as the money raised from the auction will be used to repay the company’s creditors. Wanxiang would have want the auction to take place later in December to have time to get the approval from the Committee on Foreign Investment in the US, while Johnson Controls wanted the auction on November 17th.