Bankrupt American battery maker, A123 Systems, has been auctioned off to Chinese auto parts maker Wanxiang Group, for $256 million. The sale includes A123’s automotive and commercial operations including three factories in the United States.

Rumors of A123’s sale last August raised security concerns amongst government officials over foreign controlled or owned companies gaining a niche in the United States supply chain. Over the years, A123 Systems received approximately $249 million federal grants to stimulate the manufacturing of batteries and the sale of electric vehicles in the United States. The sale of the battery company is the latest in a series of take overs of North American energy and manufacturing companies by state owned and privately held Chinese firms.

The sale excludes any business with the United States government and its military contracts. That portion of the company will be sold to a small energy company based in Illinois, Navitas Systems. The deal still requires the approval of a United States bankruptcy judge.