Chinese bid for A123 may raise security risks: Senators

Fri Nov 30, 2012 7:06pm EST
 

By Ayesha Rascoe

WASHINGTON (Reuters) - A Chinese company's attempt to take over government-backed battery maker A123 raises serious national security concerns, a bipartisan group of lawmakers said this week, adding to growing congressional opposition to the deal.

China's Wanxiang Group Corp is currently competing with U.S.-based Johnson Controls Inc to buy bankrupt A123, which makes lithium ion batteries for electric cars.

The government must ensure that any sale of A123's technology, which has also been used by the military and to support the U.S. electrical grid, does not threaten domestic security, the senators said in letter to Treasury Secretary Timothy Geithner, Energy Secretary Steven Chu and other top cabinet officials.

Among the eight senators and one senator-elect signing the letter were influential Republican Rob Portman of Ohio and Democrat Dick Durbin of Illinois.

They called on the powerful Committee on Foreign Investment in the United States (CFIUS) to consider any "potentially harmful consequences that could occur as a result" of a sale to Wanxiang.

To acquire A123, Wanxiang needs approval from CFIUS, a U.S. inter-agency panel that vets foreign deals for security concerns.

Wanxiang's law firm Sidley Austin has said that it would submit its bid to CFIUS.

The lawmakers also raised concerns that Wanxiang could receive taxpayer funded assets from A123, which was awarded a $249 million grant by the Obama administration.   Continued...