Nissan/NEC sell rechargeable electric battery business
Nissan and NEC have agreed to sell their rechargeable electric battery joint venture to a Chinese private equity firm, providing both companies with an exit from an industry that, although popular because of rising demand for electric vehicles, is capital-intensive.
The deal will see Automotive Energy Supply Corporation (AESC), which was set up in 2007 by Nissan and NEC to produce lithium-ion batteries for the automaker, acquired by GSR Capital, a Chinese private equity fund.
Nissan had been reportedly seeking a buyer of its 51 per cent stake in AESC since last year. NEC had also been in talks with GSR about buying its stake in the JV.
The transaction will be implemented by Nissan first taking full control of AESC, as well as its wholly-owned battery electrode subsidiary NEC Energy Devices (NECED), the carmaker said in a statement. The deal is expected to be completed by December this year, pending necessary approvals.
NEC was reported to be in final talks to sell NECD for about ¥15bn ($135m) to the Chinese investor, the Nikkei Asian Review said earlier this month.
No financial terms were provided by Nissan, but it was reported in May the price tag for the stake might be around $1bn.
Sonny Wu, chairman of GSR Capital, said the acquisition of AESC represented an important step in the new energy vehicle supply chain.
“We plan to further invest in R&D, expand existing production capacity in the US, UK and Japan, and also establish new facilities in China and Europe, enabling us to better serve customers around the world,” he said.
China is increasingly focusing on the global battery market amid rising demand for electric cars.
Beijing earlier this year called on domestic companies to double electric vehicle battery capacity by 2020. Meanwhile, there has been heavy speculation in the Japanese press this past month that Toyota could begin production of electric vehicles in China as early as 2019.
The move by a mass producer would mark a significant shift for Toyota, which has been a proponent of hybrid and hydrogen fuel cell technologies.
Rising demand for electric vehicles has been driving the global battery market. But for many companies it is now cheaper to buy stock from more focused, major manufacturers such as Panasonic or Samsung rather than manufacture it themselves.
Sony, a pioneer of commercially available lithium-ion rechargeable batteries, sold its loss-making battery business to Japan’s Murata Manufacturing last year.