BREAKING NEWS

BREAKING NEWS

Nissan scraps potential $1 billion sale of battery unit to China's GSR

Now Reading:

Nissan scraps potential $1 billion sale of battery unit to China's GSR

Nissan scraps potential $1 billion sale of battery unit to China's GSR
Text size Aa Aa

By Naomi Tajitsu and Thomas Wilson

TOKYO (Reuters) - Nissan Motor <7201.T> has cancelled a potential $1 billion (758.78 million pounds) sale of its electric car battery unit to China's GSR Capital, opening the door to other likely suitors keen on a component that is vital for the booming electric vehicles industry.

Japan's second-biggest automaker said the Chinese investment firm lacked the funds to make the purchase. The deal could not be closed by the June 29 deadline, Nissan said, ending a process which had faced several delays since its announcement almost a year ago.

As tightening global emissions regulations send global automakers scrambling to develop and mass produce electric cars, battery companies and auto parts makers are seeking to expand production of lithium ion batteries, a key component of these vehicles. Investors have been buying into the battery industry.

Battery and lithium producers have represented attractive assets for Chinese firms, amid a push by Beijing to promote electric vehicles and help domestic car makers leapfrog the combustion engine to build global auto brands.

In August, Nissan had announced its plan to sell Automotive Energy Supply Corp, which includes battery plants in the United States, England and Japan, for an undisclosed sum. A source told Reuters at the time that GSR had agreed to pay Nissan a total of $1 billion for the deal. https://reut.rs/2MDIwpN

Since then, the deal has faced a series of delays, including prolonged talks between GSR Capital and NEC Corp <6701.T>, which holds a 42 percent stake in the company, over the acquisition of its subsidiary NEC Energy Devices, which holds a 7 percent stake.

Nissan, which holds a 51 percent stake, had extended the transaction deadline three times from its original December 2017 closing date.

A Nissan spokesman said that the company still intends to sell the subsidiary, but declined to comment on whether GSR could still be a prospective buyer.

GSR declined to comment.

Previously, Panasonic Corp <6752.T> was among the companies which had been in talks with Nissan over a sale of the batteries unit, sources have told Reuters. Along with South Korea's LG Chem <051910.KS> and Samsung Electronics <005930.KS>, the Japanese electronics firm is a key supplier of electric car batteries, producing them for Tesla <TSLA.O>.

GSR, which has previously invested in clean technology and electric cars, mainly targets foreign industrial and emerging technology companies, including electric car batteries and pharmaceuticals firms.

Recently GSR has ramped up its dealmaking in Europe, agreeing in March to invest $500 million in Swedish electric car maker National Electric Vehicle Sweden and produce EV batteries in the country, and signing a deal to set up a $4.5 billion joint venture with Turkey's Zorlu Holding to build a battery assembly plant in Turkey.

Nissan shares were down 1.2 percent on Monday afternoon, in line with the broader Tokyo stock market <.N225>.

(Reporting by Chris Gallagher, Chang-Ran Kim and Thomas Wilson; Additional reporting by Shanghai newsroom; Editing by Stephen Coates and Muralikumar Anantharaman)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.