A123 said Sunday that the terms of the deal will see Wanxiang acquire its automotive, grid and commercial business assets, including all technology, products, customer contracts and U.S. facilities in Michigan, Massachusetts and Missouri. It will also get A123's cathode powder manufacturing operations in China and its equity interest in Shanghai Advanced Traction Battery Systems Co., A123's joint venture with Shanghai Automotive.
Excluded from the agreement is A123's Ann Arbor, Mich.-based government business, including all U.S. military contracts, which would be acquired for $2.25 million by Navitas Systems, a company that makes energy storage products for commercial, industrial and government agencies.
""We think we have structured this transaction to address potential national security concerns expressed during the review of our previous investment agreement with Wanxiang announced in August, as well as to address concerns raised by the Department of Energy," said A123 CEO Dave Vieau in a statement. "We believe this transaction balances those risks with A123's obligation to act in the best interest of our creditors."
If the deals are approved by the court, the shares will be worthless. That's because proceeds from the sale of the two parts of A123 would be less than the company owes its creditors.
Based in Chicago, Wanxiang America has been in the automotive and industrial markets in the U.S. since 1994 and currently has more than 3,000 U.S. employees. It is a subsidiary of Wanxiang Group, China's largest automotive components manufacturer and one of China's largest non-state-owned companies.
"We plan to build on the engineering and manufacturing capabilities that A123 has established in the U.S. and we are committed to making the long-term investments necessary for A123 to be successful," said Pin Ni, president of Wanxiang America.