The U.S. government said bankrupt A123 Systems Inc cannot be sold without its consent because the battery maker received a $249 million grant from the Energy Department, according to court documents.
Johnson Controls Inc (JCI.N) of Milwaukee and China's Wanxiang Group Corp are battling over who will buy A123, a maker of lithium ion batteries for electric cars. The prospect of a U.S. government-financed company being sold to a Chinese rival has drawn opposition from some politicians, who say technology underwritten by U.S. taxpayers should not fall into foreign hands.
The government objected on Tuesday to the terms of the company's proposed sale order, saying in a court filing that its approval was needed before the government's clean energy grant could be assigned to a buyer. A123 can still draw $120 million under various government grants, according to court records.