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Japanese company NEC Corp. buys A123 Systems unit for $100M

Awardee Story Japanese company NEC Corp. buys A123 Systems unit for $100M
Date: Mar 24, 2014
Author: David Harris
Source: bizjournals ( click here to go to the source)

Japan's NEC Corp. announced today that it has reached a deal to buy the grid energy storage business of battery-maker A123 Systems, a division of Wanxiang Group based in Westborough, for $100 million.

The company said an agreement on the terms of the deal for A123 Energy Solutions has been finalized and a new company, called NEC Energy Solutions, is slated to begin operation in June 2014 under the direction of NEC. A123's existing cell manufacturing and sales, research and development, and automotive operations will remain the core focus of A123 Systems LLC, according to a press release.

NEC is slated to establish a joint venture company with Wanxiang and its affiliates to address the growing China market, according to the release.

"With these combined strengths, NEC Energy Solutions will be able to help satisfy the growing demand for energy storage worldwide, whether driven by increased penetration of renewable energy from wind and solar, more effective grid stabilization services like frequency regulation and frequency response, or the desire for more efficient reinforcement of existing transmission and distribution grids," said Takemitsu Kunio, senior vice president of NEC Corp., in a statement.
Wanxiang, an auto parts provider, acquired A123 Systems last year after A123 declared bankruptcy. The deal was not without controversy, especially because the U.S. Department of Energy awarded A123 $249 million to develop its green technology.

In May of 2013, the A123 business groups focused on batteries for the electric grid, backup power and replacement parts were rebranded as A123 Energy Solutions

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