Johnson Controls lost out by more than 2-to-1 to Wanxiang America Corp.’s bid of $257 million for the assets of battery maker A123 Systems Inc. in its bankruptcy auction last week. Wanxiang America Corp. is a subsidiary of Chinese conglomerate Wanxiang Group Corp. However, Johnson Controls stated that they are still interested in acquiring the assets of A123 if the sale to Wanxiang “doesn’t work out” for regulatory reasons, according to the Wall Street Journal.
After a Delaware bankruptcy judge approved the sale on Tuesday, Johnson Controls is now believed to be lobbying the Committee for Foreign Investment in the United States to deny approval of the Wanxiang deal, according to the Washington Post. The CFIUS, led by Treasury Secretary Tim Geithner, is a federal interagency committee that reviews sales of U.S. companies to foreign owners, and its final decision on A123’s sale to Wanxiang is likely to stretch until mid-January.
A123, which was awarded a $49 million DOE grant, also had several multi-million dollar contracts with the U.S. military, says the Wall Street Journal. In order to try to alleviate U.S. concerns, Wanxiang has carved out A123’s government business from the new deal.
Outspoken critics of the deal, such as Republican Senators Chuck Grassley of Iowa and John Thune of South Dakota, voiced security concerns over a foreign purchaser of a U.S. taxpayer-funded technology company with military contracts and urged the Treasury Department to carefully scrutinize the deal.
To read the full Wall Street Journal article, click here
To read the full Washington Post article, click here