US Govn Demands Its Approval for the Sale of A123 Systems image

The US government said that A123 Systems cannot be sold without its approval as the company received a grant of $249 million from the Energy Department.

Two companies are currently battling to purchase A123 Systems, Johnson Controls Inc. and China’s Wanxiang Group Corp. The fact that the maker of lithium ion batteries for EVs could be sold to a Chinese rival company, has drawn criticism and opposition from several politicians, who will try to stop US technology to reach into foreign hands.

“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.

Therefore on 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.

Last month A123 Systems filed for Chapter 11 bankruptcy protection, planning to sell its battery business to Johnson Controls for $125 million. But China’s Wanxiang also plans to make a bid for the company at the auction next month.