China’s Govn Approves Wanxiang’s Plan to Buy A123 Systems

Although China’s government has approved Wanxiang’s purchase of A123 Systems, the deal still has to be approved by the US government.

A123 Systems, the maker of lithium ion batteries for EVs, filed for Chapter 11 bankruptcy protection last month, planning to sell its assets to Johnson Controls for $125 million. China’s government has approved the deal but Wanxiang’s purchase still depends on the auction next month and on whether the US government will give its approval, since A123 has received a $249 million grant from the Energy Department.

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. Tuesday, November 27th, the US government said that the sale will need its approval and that the terms shall include its right to demand compensation for the sale of assets which were financed by the Energy Department grant.

“This transaction would no doubt result in the loss of American jobs and the transfer of technologies critical to our nation’s infrastructure and military hardware to China,” said the letter from the Strategic Materials Advisory Council.