It's official: Takata has filed for bankruptcy protection in the U.S. and Japan. After months of searching for a buyer, the struggling airbag company has agreed to sell its assets to Key Safety Systems, a Michigan-based supplier.
KSS announced it will buy "substantially all" of Takata's assets in a deal worth approximately $1.59 billion. Notably, the sale will not include certain Takata operations surrounding ammonium nitrate airbag inflators that led to recalls around the globe. Operations relating to these airbags will be run by a reorganized Takata following the transaction, and eventually they will be wound down.
Takata is working with KSS on a final agreement to be released in the coming weeks. The transaction is expected to close in the first quarter of 2018.
Now that Takata is on board, KSS' operations will include 60,000 employees in 23 countries. KSS plans to keep "substantially all" of Takata's current employees around the world as well as its manufacturing plants in Japan.
Takata boss Shigehisa Takada said in a statement, "Throughout this process, our top priorities have been providing a steady supply of products to our valued customers, including replacement parts for recalls, and a stable home for our exceptional employees. This agreement would allow that to continue."
"Although Takata has been impacted by the global airbag recall, the underlying strength of its skilled employee base, geographic reach, and exceptional steering wheels, seat belts and other safety products have not diminished," said KSS President and CEO Jason Luo in a statement.
Just a few months ago, Takata plead guilty to wire fraud in the U.S. and admitted to faking inflator test data. Takata also agreed to a $1 billion settlement, with $125 million to compensate victims, $25 million for criminal fees, and $850 million to pay back automakers that have issued recalls to fix the airbags.
Takata's airbags have been known to explode with too much force and spew metal shards throughout the cabin of a vehicle. At least 16 deaths and 180 injuries have been linked to the faulty airbags worldwide.
Source: KSS, Automotive News (Subscription required)