Wanxiang Group, China’s largest automotive part producer, is looking to purchase an 80% stake in US battery maker A123 Systems (AONE.Nasdaq) for a total of US$450 million, Reuters reported. The memorandum of understanding drafted between the two companies states that Wanxiang will provide US$50 million on closing the deal, in addition to an initial loan of US$25 million. The Chinese firm will also purchase senior secured convertible notes worth US$200 million and invest approximately US$175 million via the warrants it would recieve in connection to the loan and convertible notes. A123, which recieved a US$249 million green-tech grant under the Obama administration in 2009, posted a second-quarter loss of US$82.9 million. “We expect that a strategic agreement with Wanxiang would help enhance our competitive position in the global marketplace, especially in China,” said A123 CEO, David Vieau.
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