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.
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]