Wanxiang acquires A123

Bankrupt American maker of advanced batteries falls to China for US$257 billion.

A123 Systems, one of the few American companies making advanced lithium-ion automotive batteries for commercial and military use, is now owned by Chinese auto parts maker Wanxiang Group.

The company said its sale to Wanxiang only included its automotive, grid and commercial business assets, and a manufacturing facility in China. Excluded from the sale is the company’s business with the U.S. military that was sold to Illinois-based Navitas Systems for US$2.25 million.

The sale will require the approval of the U.S. Committee on Foreign Investment that includes the secretaries of Treasury, Homeland Security, Defense, State, Commerce and Energy, and the Attorney General, and considers the national security implications of such investments.

The electric car battery maker was a major supplier to the U.S. electric car industry and received a US$249 stimulus grant from the federal government but later filed for bankruptcy. The company was a flagship of President Barack Obama’s attempt to stimulate new environmentally friendly industries but fell into bankruptcy due to weak sales of electric cars in the USA.

Wanxiang America Corporation, based in Chicago, is the U.S. home office of Wanxiang Group Companies China and was named the buyer of A123.