Reuters: Regulatory News: UPDATE 1-China approves Wanxiang plan to buy U.S. battery maker A123

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UPDATE 1-China approves Wanxiang plan to buy U.S. battery maker A123 Nov 30th 2012, 03:48 Thu Nov 29, 2012 10:48pm EST * Wanxiang gets Beijing backing to acquire U.S. battery maker * A123 takeover hinges on U.S. government approval SHANGHAI Nov 30 (Reuters) - China's government has approved a plan by Wanxiang Group Corp, a major Chinese auto parts maker, to acquire bankrupt U.S. battery maker A123 Systems Inc , although a deal still hinges on the outcome of an auction next month and U.S. government approval. A123, a maker of lithium ion batteries for electric cars, filed for Chapter 11 bankruptcy protection in October with a plan to sell its battery business to Milwaukee-based Johnson Controls for $125 million. The planned sale will depend on whether better bids are received at next month's auction. Wanxiang has said it intends to make a bid. China's National Development and Reform Commission, whose approval is required for major overseas acquisitions by Chinese companies, said in a statement posted on its website on Friday that it had approved Wanxiang's plans for a bid. Any deal for A123 must receive the blessing of the U.S. government, however, as the company has received a $249 million grant from the Energy Department. Republican Senators John Thune and Chuck Grassley have raised concerns about Wanxiang's attempt to acquire A123's battery business, saying military and taxpayer-funded technology should not be allowed to fall into foreign hands. The Energy Department has stressed that none of the government's grant would be allowed to fund facilities abroad. Link this Share this Digg this Email Reprints

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