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A123 Systems receives bankruptcy court approval of stalking horse bidding procedures

The United States Bankruptcy Court for the District of Delaware has granted A123 Systems approval of the bidding procedures and stalking horse bid protections in connection with the previously announced stalking horse asset purchase agreement, under which Johnson Controls intends to acquire A123’s automotive business assets in a court-supervised process under Section 363 of the U.S. Bankruptcy Code. (Earlier post.)

In addition to the stalking horse asset purchase agreement with Johnson Controls, A123 continues to engage in active discussions regarding strategic alternatives for its grid, commercial, government and other operations, and has received several indications of interest for these businesses.

This is an important milestone in our reorganization process and we are pleased to be making progress with the bidding process. A123 and its advisors are confident that the court-supervised transaction process provides a level and fair playing field for all participants. We are encouraged by the continued interest in A123’s assets from Johnson Controls, which has stated an interest in expanding its bid to acquire A123’s government business. We are also encouraged by the interest in A123’s assets from Wanxiang Group Corporation and multiple additional parties.We are committed to acting in the best interests of A123, its employees and its other stakeholders and look forward to engaging in a robust auction process.

—Dave Vieau, Chief Executive Officer of A123



"A stalking horse offer, agreement, or bid is an attempt by a debtor to test the market in advance of an auction.[1] The intent is to maximize the value of its assets as part of (or before) a bankruptcy court-approved auction process.[2]"


R-Senators are trying to impose their anti-China one-way free trade ideology to block the sale of A123 to Chinese firms for some obscure reasons? Will they manage to do it even if they lost the election? Can battery makers survive with high production cost in USA? Is there an alternative to moving to Asia?


Maintaining domestic batttery production is essential for keeping an industry and meeting national security requirements for defense-related equipment.


Harvey, The repubs think they can at least look patriotic, and JCI probably is more interested in selling lead acid batteries. Kelly has said this before too. JCI is the largest manufacturer of lead acid batteries in the world. The A123 low temp technology makes it possible to consider li-ion as a replacement for lead acid. Even if they don't intend to pursue this tech for a product, they certainly don't want to compete againsts it. JCI is likely just protecting their current market. Wanxiang will likely just make and sell the tech, also something the GOP doesn't want, because their master is oil.


There are too many applications where lead-acid can't compete, including power tools and hybrid vehicles.  JCI isn't dumb enough to buy a company which gives it entrance to such markets just to hand its strategic position to Beijing; it could get that for free.

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