The saga of bankrupt battery maker A123’s controversial sale to China’s Wanxiang may be coming to a close. According to news reports citing anonymous sources at A123, a key federal body has approved the Chinese automotive manufacturing giant’s winning, $256 million bid to take over almost all of A123’s assets -- except its work with the U.S. military.

The Committee on Foreign Investment in the United States, the Treasury Department body with authority over sales of critical U.S.-owned assets, has declined to confirm these reports so far. But Pin Ni, president of Wanxiang America, praised the news in statements, saying his company was looking forward "closing the transaction and to continuing to foster the technologies A123 has worked so hard to develop.”

CFUS’ decision to not challenge Wanxiang’s buyout comes after months of controversy, with opponents of the sale saying the deal could lead to critical technology with national security applications being turned over to a foreign government.

U.S.-based Johnson Controls, which lost its A123 takeover bid to Wanxiang, had filed an appeal to the sale in U.S. Bankruptcy Court in Delaware, amidst courtroom accusations from creditor attorneys that it and other U.S. corporate interests are lobbying in Congress to stop Wanxiang’s bid.

Members of Congress and U.S. industry group Strategic Materials Advisory Council also expressed opposition to the deal, and one bill introduced earlier this month would seek to give Congress authority over such sales in the future.

But for now, CFUS approval of the sale would appear to lift the last roadblock to Wanxiang taking over substantially all of A123’s assets. The exception is the Waltham, Mass.-based company’s military and U.S. government contracts, which A123 has agreed to sell to Illinois-based Navitas Systems for $2.25 million.

Wanxiang gets the remainder of the Waltham, Mass.-based company’s assets, including its automotive business with customers like Fisker, General Motors, BMW, Tata Motors and Smith Electric Vehicles, and its grid storage business, with partners including AES Energy Storage, Sempra Energy and NSTAR.

Just how many of those customers will remain with A123 through its transition remains to be seen. GM, which has tapped A123 to build batteries for its Spark EV, has remained mum on whether it will continue to work with the company as it goes through bankruptcy. Fisker, which accounted for 26 percent of A123’s revenues at the time of its bankruptcy, is facing its own challenges. On the grid-scale energy storage front, AES, which accounted for 24 percent of A123’s revenues at the time of its bankruptcy, last week announced a new battery partner, Mitsubishi-GS Yuasa, for a 20-megawatt lithium-ion energy storage project in Chile.

A123 has already been under investigation by Congress over its $249.1 million in DOE grants, of which about $130 million has been drawn, mainly to build and run its factories in Michigan. Wanxiang has agreed to forego the balance of those loans, and has also agreed to keep A123’s U.S. operations up and running -- something Wanxiang has done with other struggling automotive manufacturing companies it has invested in in the United States.

Tags: a123, aes energy storage, bankruptcy, batteries, china, committee on foreign investment, congress, doe, fisker, johnson controls, military, national security, navitas systems, treasury department, wanxiang