Wanxiang Group’s purchase of A123 Systems Inc. has been approved by the U.S. government, despite concerns of sensitive technology being transferred to China.
China’s largest auto parts maker bid about $257 million, which won against U.S. rival Johnson Controls Inc. for A123 Systems, which filed for bankruptcy in October. A123 previously had received a $249 million grant from the U.S. government, almost half of which was never used.
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In hopes of curbing criticism for the purchase, A123’s defense contracts will be excluded from its bid at the auction; those contracts were sold to Navitas Systems separately for $2.25 million. The Committee on Foreign Investment in the United States approved the sale to Wanxiang, who generates around $1 billion in U.S. revenue by supplying parts to American automakers such as General Motors and Ford. According to a Congressional report, Wanxiang has invested in more than 20 U.S. companies, many of which were in bankruptcy.
[Source: Automotive News]