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20-Feb-2013

PHOTO CAPTION: Fisker Karma has been plagued by early start-up problems and is looking for additional investors, at least one said to be in China.

Chinese Firms Quietly Buying Up US Advanced Automotive Assets

From promising Boston Power to struggling Fisker Automotive, Chinese firms are acquiring control of US, as well as, European firms pioneering advanced automotive technologies.

Electric car startup Fisker Automotive is reportedly weighing investment and acquisition offers from Chinese auto tech companies. Bloomberg reports that there’s a $350 million offer for 85 percent of the company from Chinese state-owned car maker Dongfeng Motor Corp, and Reuters reports that China’s Zhejiang Geely Holding Group (which owns Volvo) has another offer for a majority stake with a deal between $200 million and $300 million.

If Fisker is able to close on either of these deals, it could move its business to China and gain the funds to start manufacturing its second car the Atlantic, as well as start paying back its loan to the Department of Energy. Fisker has been looking for suitors -- partners and acquirers -- for months, as it wrapped up a year with an incredible amount of problems.

But $350 million for 85 percent stake is a major discount on the original valuation of Fisker. The company has raised a billion dollars in funding, and at one point back in 2011 had raised money at a reported valuation of $2.2 billion. But in 2012, the company struggled heavily and I had heard that it was looking to raise money last year at a significantly lower valuation. Clearly, when discussions are for majority stake deals for between $200 million and $300 million, there’s been massive discounting.

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