A US government panel has approved the purchase by China's biggest auto parts maker, Wanxiang Group, of nearly all the assets of A123 Systems Inc, a Massachusetts-based maker of electric-car batteries that declared bankruptcy last year.

Ni Pin, president of the Chinese company's US subsidiary, Wanxiang America, said company lawyers were working on final details of the $257 million deal at a court-supervised bankruptcy auction in December.

China's biggest auto parts maker Wanxiang Group was approved to buy nearly all the assets of A123 Systems Inc, a Massachusetts-based maker of electric-car batteries. [Long Wei / Asianewsphoto]

Regarding the decision by the Committee on Foreign Investment in the United States, or CFIUS, Ni said in an interview: "Symbolically, it is a sign of how the US government deals with foreign investment." Wanxiang America on Tuesday announced the committee's decision.

The federal interagency committee, led by the Treasury Department, reviews large or sensitive deals involving foreign investors in the US.

The CFIUS panel has rejected acquisition attempts by Chinese companies in the past. Some members of Congress and retired military officers had asked the CFIUS to reject the Wanxiang bid on national-security grounds, citing A123's defense contracts.

"It is a procedural issue. As long as you are transparent, follow the procedures and rules, and address the issue, it should be OK," Ni said.

Wanxiang will acquire all of A123's assets in three business segments - automotive, grid and commercial operations - and their technology, products and customer contracts.

Also included are manufacturing plants in Massachusetts, Michigan and Missouri; a cathode-powder plant in China; and an equity stake in Shanghai Traction Battery Systems Co, a joint venture with Shanghai Automotive Industry Corp.

"We've been in the battery business for more than 10 years, so it's a natural expansion," Ni said. "Whoever is available, we will be interested."

Mergers and acquisitions have long been a key part of the strategy in the US for the company, which completed five deals in 2012.

Still, he acknowledged that the lobbying effort had been difficult. "This is the most politically complicated issue in the past few years," Ni said.

Wanxiang's bankruptcy-auction bid for A123 was higher than that submitted jointly by Wisconsin-based Johnson Controls Inc, which makes batteries and other automotive equipment, Japan's NEC Corp and German conglomerate Siemens AG.

Johnson Controls had appealed a US bankruptcy judge's approval of Wanxiang as the winner.

"Everyone has the right to have their voice heard, so you can hear from both sides. But this just means this asset (A123) is very valuable from their point of view," Ni said.

A123 received $249 million in grants from the US Department of Energy in 2009 to build a factory in Michigan, but the company struggled until filing for bankruptcy protection from creditors last October.

That was just two months after Wanxiang came forward with a $465 million offer for the battery maker's automotive-business assets, pushing aside a planned sale to Johnson Controls. The initial Wanxiang offer, however, didn't succeed.

"Given the overwhelming difficulties on the political side of this particular deal, that does mean if you know how to handle it, and handle it professionally and rationally, you might still be OK," Ni said, referring the CFIUS review.

While lawmakers could ask for a briefing on its decision, CFIUS has no appeal process.

Wanxiang entered the US market in 1994 and now has manufacturing operations in 14 states. Its US operations generate annual revenue of about $2.5 billion and employ 6,000 people.

yuweizhang@chinadailyusa.com