A123 Systems Inc., the Waltham battery maker, said Sunday that it plans to sell nearly all its assets to the North American arm of China’s largest auto parts manufacturer for $256.6 million, pending approval by US Bankruptcy Court and the federal government.
What effect the new ownership, by Wanxiang America Corp., would have on A123’s business and jobs in Michigan and Massachusetts is unclear, but Wanxiang has said it is committed to keeping and expanding the company’s US operations. A123 has about 1,000 US employees, including roughly 300 in Massachusetts.
David Vieau, A123’s chief executive, said he believes A123’s business of developing utility-scale storage for the power grid as well as its research-and-development operations will remain in Massachusetts, and that Wanxiang’s main focus will not be cutting jobs, but reorganizing to advance the company and its technology at a lower rate of spending.
A123 never reported a profit.
“They see this as an investment for the future,’’ he said. “They’re very much supportive of long-term growth prospects for the business.’’
In an e-mail, Wanxiang America’s president, Pin Ni, said: “Just like any business, improving the efficiency and making profit is the foundation. But we will invest and we want to see A123 be a healthy company.’’
A sales hearing before a bankruptcy judge in Delaware is set for Tuesday, and a decision is expected shortly. Since Wanxiang America is owned by the Chinese auto parts conglomerate Wanxiang Group, the acquisition of A123’s assets must be approved by the Treasury Department’s Committee on Foreign Investment in the United States.
Vieau said the committee may not rule on the Wanxiang deal before late January. Until that happens, he said, A123’s assets will be placed in a trust, which will manage the company in the interim.
“A123 is going to continue to exist as a company and a brand,’’ Vieau said, adding that he will remain with the company at least through the closing of this deal.
Wanxiang beat out several competitors, including Johnson Controls Inc. of Milwaukee and Japan’s NEC Corp., during a bankruptcy auction that started Thursday and lasted until roughly 4 a.m. Saturday.
Under the deal, Wanxiang will purchase A123’s automotive, grid, and commercial battery businesses, including all of the company’s technology, products, and private customer contracts, as well as its manufacturing plants in Michigan, Massachusetts, and Missouri.
It will also acquire a manufacturing operation in China and the company’s interest in a joint venture with Shanghai Automotive, a Chinese automaker.
A123’s government-based business, including all US military contracts, is being acquired in a separate $2.25 million transaction by Navitas Systems LLC, a relatively new energy storage company in Woodbridge, Ill.
On Sunday, several involved in the auction said they feel confident Wanxiang’s purchase of A123 will win the necessary approvals.
“It’s fair to say that the company and the creditors’ committee were very keenly focused on having a transaction that had the highest dollar amount and that we believe will be able to be closed,’’ said Tim Pohl, a managing director at Lazard Freres and Co., the investment bank that led A123 through the sale process. “There were a lot of rounds of active bidding, so it was a hard-fought victory for Wanxiang to come out on top.’’
William Baldiga, counsel for the Official Committee of Unsecured Creditors in A123’s bankruptcy, echoed the sentiment, saying unsecured creditors, who get paid after secured creditors resolve their claims, should receive some money from this deal, though it is too early to say how much.
“For us, the entire focus was on what is best for creditors,’’ Baldiga said. “And we are satisfied that this result is indeed best for creditors.’’
For Wanxiang, the announcement ended a long, aggressive courtship of A123. In August, Wanxiang agreed to invest up to $465 million in exchange for an 80 percent stake in the company.
But that quickly drew criticism from congressional leaders, who worried about a Chinese company acquiring sensitive technology developed with the support of taxpayer dollars, including a nearly $250 million federal grant for A123 to expand manufacturing capabilities in Michigan.
In the end, A123, founded in 2001 using technology developed at the Massachusetts Institute of Technology, simply ran out of time and money — the victim of high production costs, the slow adoption of electric vehicles, and a costly recall earlier in the year. A123 filed for bankruptcy protection in mid-October.
A123 would be the fifth clean-energy investment made in the United States this year by Wanxiang, which has 3,000 US employees. Pin Ni, Wanxiang America’s president, said he believes his company make A123 successful.
“Because we are not a public company,’’ he said, “I believe we could have more freedom to support its growth.’’