Nissan abandons $1 billion battery business sale to China’s GSR Capital

Bloomberg

Nissan Motor Co. abandoned a $1 billion deal to sell its electric-battery business because the prospective buyer failed to raise the money required.
The Japanese automaker cancelled the sale to GSR Capital, saying in a statement on Monday the Chinese private-equity firm didn’t have sufficient funds. Nissan and GSR were due to close the transaction by June 29. The deal had already been postponed three times, most recently on April 27, because certain conditions hadn’t been met.
The deal with GSR for Nissan subsidiary Automotive Energy Supply Corp. and manufacturing operations in Japan, the US and UK would have ended a long search for a buyer as the carmaker works to streamline operations.
The sale would have been the largest transfer of lithium-ion battery manufacturing capacity ever, Bloomberg NEF wrote in a report in August, when the agreement was first announced, and would have given Nissan flexibility to shop around for battery suppliers.
Nissan is evaluating its options, and it’s too early to say what it will do with the battery business, a spokesman for the carmaker said by phone.
The sale would have given Nissan more funds to invest in key next-generation technologies, such as autonomous driving. The automaker has been selling stakes in businesses including parts manufacturer Calsonic Kansei Corp. and forklift truck maker UniCarriers Corp. Nissan is also looking to push into Southeast Asia with its purchase of a stake in Mitsubishi Motors Corp.
Nissan’s desire to sell the battery business probably remains intact as it seeks to improve cost competitiveness, said Ali Izadi-Najafabadi, an analyst at BNEF. It’s plausible that as a next step, Nissan would try to engineer a deal for the business with battery suppliers to the broader Nissan-Renault-Mitsubishi Motors alliance, which include LG Chem Ltd., GS Yuasa Corp. and Toshiba Corp., he said.
Nissan Chairman Carlos Ghosn has for several years said that buying batteries from suppliers would be more economical than making them.
A decade later the landscape is very different, particularly with China’s push for electric-vehicle dominance nurturing the rise of battery colossus Contemporary Amperex Technology Co., or CATL.
GSR, backed by the Hubei provincial government, has been pouring money into battery-related businesses overseas, including a $500 million investment in National Electric Vehicle Sweden AB and a partnership with Turkey’s Zorlu Holding for $4.5 billion in investments over five years.