Wanxiang wins A123 at auction

Chinese auto parts firm Wanxiang is the proud owner of battery maker A123 Systems, having won this week’s bankruptcy auction with a bid of between $250 million and $260 million, according to the Wall Street Journal. Other bidders included Johnson Controls, NEC and Siemens.

Wanxiang will not be buying the segment of A123 that provides batteries to the US military – that business went to another firm. Several in Congress have expressed concerns about A123’s taxpayer-funded technology going to a Chinese purchaser. Divesting the military-related contracts will surely make the deal more likely to go through.

Wanxiang comes out a winner in more ways than one. It was ready to pay $465 million for A123 a few months ago, before that deal collapsed. Now it will get the company for a couple hundred less. The losers are A123’s stockholders, who could probably have used that couple hundred, and US taxpayers, who now have little to show for the $249 million grant that A123 received.

It’s too early to say how A123’s customers will fare. GM, which will use A123 (er, Wanxiang) batteries in its 2014 Chevrolet Spark EV, has said it does not foresee any supply issues. Fisker, which relies on A123 for battery packs for the Karma, has said it looks forward to working with whoever takes over (and quickly, please).

 
 
Sources: WSJ