On December 6th, Wanxiang Group and Johnson Controls will take part at the auction to buy bankrupt A123 Systems.
Besides Chinese Wanxiang Group and US Johnson Controls, who recently offered to buy A123, Japanese NEC Corp and German Siemens AG also expressed their interest in the company. The entire deal has also drawn scrutiny from the U.S. Department of Energy which has offered A123 a $130 million loan.
A123 Systems filed for bankruptcy last month, 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 has sent A123 a confidential proposed bid for its entire business, but even if the company agrees it will still need approval from the Committee on Foreign Investment in the US. Wanxiang would have want the auction to take place later in December to have time to get the approval, while Johnson Controls wanted the auction on November 17th. Wanxiang and Johnson Controls will have to face a tough competition as other powerful companies are interested in buying A123.
“This is not a two-horse race. This is a 10-horse race,” said Timothy Pohl of Lazard Freres & Co.