The Obama administration approved the sale of most of bankrupt battery maker A123 Systems’ assets to Chinese firm Wanxiang Group Corp.
The company’s U.S. subsidiary, Chicago-based Wanxiang America, said it has received approval from the Committee on Foreign Investment in the U.S. to complete its acquisition of substantially all of the non-government business assets of A123 Systems, Inc. The sale officially closed late Tuesday, the company said.
“We’re pleased the government has completed its review and provided us with the go-ahead to finalize this transaction,” said Pin Ni, president of Wanxiang America. “The future is bright for A123. It is a company with exceptional talent and potential, and Wanxiang America is committed to its long-term success and the continuance of its U.S. operations. Wanxiang America looks forward to closing the transaction and to continuing to foster the technologies A123 has worked so hard to develop.”
In December, Wanxiang won a bankruptcy court auction to acquire most of A123 for $256.6 million, including its grid and commercial business assets and its U.S. facilities in Michigan, Massachusetts and Missouri.
A123 had vowed to create 3,000 jobs by the end of 2012, but only has 1,300. It won $249.1 million in grants from the Obama administration in 2009 to build battery plants in Romulus and Livonia, but has only spent $132 million. It also received more than $125 million in tax credits and funding from the state of Michigan.
The Energy Department said it worked during A123′s bankruptcy to keep jobs in Michigan.
“The Energy Department’s Recovery Act grant to A123 was used for the construction of brick and mortar advanced battery manufacturing facilities at two Michigan locations,” said Energy Department spokesman Bill Gibbons. “Consistent with the intent of that investment, the purchase of these assets includes the Energy Department’s requirement that the plants and equipment partially paid for by the Recovery Act stay in Michigan and continue to operate, generating job opportunities for American workers and helping to establish a domestic manufacturing base for this growing global market.”
Navitas Systems, a Woodridge, Ill.-based company, has agreed to buy A123′s Ann Arbor-based government business, including all U.S. military contracts, for $2.25 million.
The committee, which is headed by the Treasury Department and includes other government agencies, makes no public announcement of decisions and releases no written findings.
“It doesn’t surprise me that they approved it,” said Josh Zive, a Washington lawyer who represents companies before the committee, noting that Wanxiang agreed not to buy the military and government contract assets.
President Barack Obama hailed A123 and even invited the company’s CEO to the Rose Garden in April 2010.