KSS will acquire all of Takata’s assets, except for certain assets and operations that relate to manufacture and sale of phase-stabilised ammonium nitrate airbag inflators.
26 Jun 2017 | 3656 Views | By Autocar Pro News Desk
Key Safety Systems (KSS), the mobility safety equipoment supplier headquartered in Michigan, USA, and Takata Corporation have announced today that they have reached an agreement in principle to sponsor a restructuring plan for the purchase of substantially all of Takata’s global assets and operations by KSS for an aggregate purchase price of ...
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Key Safety Systems (KSS), the mobility safety equipoment supplier headquartered in Michigan, USA, and Takata Corporation have announced today that they have reached an agreement in principle to sponsor a restructuring plan for the purchase of substantially all of Takata’s global assets and operations by KSS for an aggregate purchase price of $1.588 billion.
The deal has been announced after the Japan-based Takata, which manufactures seatbelts, airbags and child seats, filed for bankruptcy protection in the USA and its home market. The company has been involved in the automotive industry’s largest global recall as a result of defective airbags. Faulty inflators in some airbags have been linked to 17 deaths globally as a result of expanding extremely fast and spraying metal shrapnel.
Under the agreement, KSS will acquire substantially all of Takata’s assets, except for certain assets and operations that relate to Takata’s manufacturing and sale of phase-stabilised ammonium nitrate (PSAN) airbag inflators. It is expected that Takata’s PSAN-related operations will be run by reorganised Takata following the transaction closing and eventually will be wound down.
Commenting on the planned acquisition, Jason Luo, president and CEO of KSS, said: “Takata has deep management talent, a dedicated workforce and a long history of exceptional customer service. Although Takata has been impacted by the global airbag recall, the underlying strength of its skilled employee base, geographic reach, and exceptional steering wheels, seatbelts and other safety products have not diminished. We look forward to finalising definitive agreements with Takata in the coming weeks, completing the transaction and serving both our new and long-standing customers while investing in the next phase of growth for the new KSS.”
Shigehisa Takada, chairman and CEO of Takata, said: “KSS is the ideal sponsor as we address the costs related to airbag inflator recalls, and an optimal partner to the company’s customers, suppliers and employees. The combined business would be well positioned for long-term success in the global automotive industry..”
KSS plans to retain substantially all of Takata’s employees across the world on comparable employment terms as currently provided. The company has held in-depth discussions with Takata’s major OEM customers and has jointly developed a transaction structure and operating plan to facilitate ongoing supply of Takata parts.
KSS says it plans to continue to support and utilise Takata’s presence in Japan, and does not intend to shut down any of Takata’s manufacturing facilities there. Furthermore, KSS intends to establish an Asia regional headquarters in Tokyo, which should create new jobs in Japan, and plans to retain Takata’s existing non-PSAN supplier contracts to maintain an uninterrupted supply chain. KSS also intends to invest in many of Takata’s other worldwide manufacturing facilities and technology and R&D centers.
KSS has substantially completed its due diligence, and Takata and KSS are working toward finalising a definitive agreement in the coming weeks.