According to the latest Reuters news, Wanxiang Group, China's largest auto parts supplier, has obtained approval from the government and will proceed to bid for the assets of American battery supplier A123 Systems.
On November 30, the National Development and Reform Commission of China announced on the official website that Wanxiang Group’s application for the acquisition of A123 was approved. The success or failure of Wanxiang’s acquisition of A123’s assets currently depends on whether it can win bids and obtain US government approval. In December of this year, A123’s assets will begin to bid for the auction. In addition to universal, the United States Johnson Controls, Japan Electric Corporation (NEC) and Germany’s Siemens also participate in the bid.
In August this year, Wanxiang had signed a non-binding investment letter of intent with A123 to acquire 80% of its common equity, but it was questioned by US lawmakers. The reason for the congressmen is that the multi-billion-dollar U.S. taxpayers’ funds will flow to overseas companies through the auto industry recovery act, and the acquisition of A123 shares by Wanxiang will further exacerbate this trend.
On October 16, A123 submitted a bankruptcy protection application to the court. Johnson Controls subsequently proposed to purchase A123 Systems’ automotive battery business for US$125 million, and provided a $72.5 million debtor to hold asset financing.
In late November, A123 received final approval from the U.S. Bankruptcy Court, accepting an asset loan from a $50 million debtor provided by Wanxiang.
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