Transaction enables greater technology diversity in A123's product portfolio

LIVONIA, Mich.--A123 Systems LLC, a developer and manufacturer of advanced Nanophosphate® lithium-ion batteries and systems, today announced that it recently completed the sale of its facilities for the production of certain battery materials to Johnson Matthey, a world-class manufacturer of specialty chemicals. The facilities in Changzhou, China produce lithium iron phosphate (LFP), the cathode material that A123 has historically used across its product portfolio and the companies have entered into a long term supply agreement where Johnson Matthey will supply all of A123's LFP requirements.

A123 is maintaining its considerable research and development capability related to battery materials and is presently developing further improvements to its LFP formulation as well as other modern battery materials. In this transaction, A123 has also retained ownership of its intellectual property in battery materials and Johnson Matthey will produce A123's Nanophosphate formulation of LFP exclusively for A123. "This deal is good for both companies as A123 seeks to rationalize its supply chain while Johnson Matthey can leverage its substantial experience in the manufacturing of specialized materials." said Jason Forcier, CEO of A123 Systems. "We look forward to a long and prosperous relationship with the Johnson Matthey team."

The deal has strengthened Johnson Matthey's position in the battery technologies sector through the production and commercialisation of advanced battery materials. It will also support Johnson Matthey's product development programs, working with A123 and other materials customers to provide the next generations of materials.

Johnson Matthey's Battery Systems business will maintain its position as a cell-independent system designer, selecting the most appropriate cell chemistry to meet the needs of each application. The LFP manufacturing assets of A123 together with Johnson Matthey's materials expertise and experience in battery system development provide a powerful combination of applications engineering, materials science and electrochemistry. Commenting on the transaction, Robert MacLeod, Chief Executive of Johnson Matthey said: "This acquisition marks a further step in the development of Johnson Matthey's battery technologies business. It will strongly complement our battery systems expertise and battery materials research programmes to provide a stronger platform for the development of next generation higher performance products that can meet the challenging energy storage requirements of batteries for the automotive sector."

About A123 Systems

A123 Systems LLC, a wholly owned subsidiary of Wanxiang Group, is a leading developer and manufacturer of advanced lithium-ion batteries and energy storage systems for transportation and other commercial and industrial applications. The company's proprietary Nanophosphate® lithium iron phosphate technology is built on novel nanoscale materials initially developed at the Massachusetts Institute of Technology and is designed to deliver high power and energy density, increased safety and extended life. A123 leverages breakthrough technology and expert system integration capabilities to enable next-generation products for its customers globally. For more information, please visit www.a123systems.com.

About Johnson Matthey

Johnson Matthey is a global speciality chemicals company underpinned by science, technology and its people. A leader in sustainable technologies, many of the group's products enhance the quality of life of millions through their beneficial impact on the environment, human health and wellbeing. The group focuses on clean air, clean energy and low carbon technologies and is an expert in the application and recycling of precious metals. Johnson Matthey has operations in over 30 countries and employs around 12,000 people. Its products and services are sold across the world to a wide range of advanced technology industries. For further information, please visit www.matthey.com.