Wanxiang Group got the court approval for the purchase of bankrupt A123 Systems, but a US rival might plan to kill the deal.
On Saturday, December 8th, A123 Systems was bought at an auction by Chinese Wanxiang Group for $256.6 million, outbidding Johnson Controls Inc. of Milwaukee. Several US politicians immediately started to express their concerns regarding the sell of US technology to an economic rival. But Johnson Controls said it remains interested in the deal if Wanxiang doesn’t get the US government approval, a move which might block the deal.
“I’m troubled by suggestions that someone who participated in the auction may in fact already be working against it,” said Delaware Bankruptcy Judge Kevin Carey at the end of Tuesday’s hearing.
William Baldiga of Brown Rudnick, who represents the official committee of unsecured creditors, told Judge Kevin Carey that he has a confidential letter according to which Johnson Controls planned to undermine Wanxiang, if the Chinese company is to win the auction. If over the following weeks the foreign investment committee rejects the sales, Wanxiang will lose the deal and its money will be used to replay A123’s creditors.