A123 Systems announced on December 11 that it has received approval from United States Bankruptcy Court for the District of Delaware to sell substantially all of A123’s assets to Wanxiang America Corp.
The sale is subject to certain closing conditions, including approval from the Committee for Foreign Investment in the United States (CFIUS).
The Court has also granted approval for A123 to sell its government business to Navitas Systems.
As previously announced, A123 and Wanxiang have agreed to terms on an asset purchase agreement through which Wanxiang would acquire substantially all of A123’s assets for $256.6 million.
Excluded from the asset purchase agreement with Wanxiang is A123’s government business, including all U.S. military contracts, which would be acquired for $2.25 million by Navitas Systems through a separate asset purchase agreement.
Before the agreement China’s top planning agency said it had approved Wanxiang Group’s plan to acquire A123. The announcement was posted on the National Development and Reform Commission’s website on November 30.
“We believe an acquisition by Wanxiang will provide A123 with the financial support necessary to strengthen our competitive position in the global vehicle electrification, grid energy storage and other markets, and we look forward to completing the sale,” said Dave Vieau, chief executive officer of A123.
“Receiving Court approval of our asset purchase agreement with Wanxiang and Navitas is an important step toward finalizing the sale of A123’s assets, and we are now focused on CFIUS approval of the sale to Wanxiang, which we are confident that we will receive given the structure of this transaction,” he added.
Analysts believe that Wanxiang has masterminded the takeover of A123 not only anticipating a bankruptcy proceeding for the troubled American company but also successfully maneuvering past the U.S. presidential election.
An attorney for A123 told the Court judge Kevin Carey that the initial 30-day review period for CFIUS was expired, and that the panel planned to continue its investigation during a 45-day extension, meaning a decision may not come until mid-January.