Financing Deal:US Battery Maker & China Firm
A123 Systems has reached a final agreement with Chinese company, Wanxiang Group that will provide emergency capital and eventually acquire a controlling stake in A123.
A123 Systems will receive an initial $25 million from Wanxiang. Over time, Wanxiang is expected to invest a total of $465 million and take an 80% ownership interest in A123.
The deal with Wanxiang Group, one of China’s biggest auto suppliers, is considered crucial to the survival of A123, a centrepiece of the Obama administration’s efforts to support battery manufacturing in the United States.
A123 has struggled mostly because of the slow pace of growth for electric vehicles in the United States. The company is also considerably smaller than Asian competitors that dominate the global battery industry.
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