Nissan Motor has cancelled a potential $1 billion 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, reports Reuters.
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.
Since then, the deal has faced a series of delays, including prolonged talks between GSR Capital and NEC Corp, which holds a 42 per cent stake in the company, over the acquisition of its subsidiary NEC Energy Devices, which holds a 7 per cent stake.
Nissan, which holds a 51 per cent 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.