US based automotive parts maker Johnson Controls has signed an agreement to acquire bankrupt lithium iron phosphate batteries and systems manufacturer A123 Systems' auto business for $125m.
Under the terms of agreement Johnson Controls will acquire A123 Systems' automotive technology, products and customer contracts as well as the plants in Livonia and Romulus, Michigan state of US and its cathode powder manufacturing facilities in China.
Johnson Controls will also acquire company's equity interest in Shanghai Advanced Traction Battery Systems.
In addition, Johnson Controls will also provide A123 Systems with $72.5m to continue its operations at the two battery facilities located in Livonia and Romulus, Michigan.
The asset purchase agreement also includes provisions through which Johnson Controls intends to license back to A123 certain technology for its grid, commercial and government businesses.
A123 CEO David Vieau said, "We believe the asset purchase agreement with Johnson Controls, coupled with a Chapter 11 filing, is in the best interests of A123 and its stakeholders at this time."
