Monday, April 16, 2018
Source: Reuters
Auto components maker Key Safety Systems completed a $1.6 billion deal to acquire air-bag maker Takata Corp, whose faulty inflators triggered the auto industry’s biggest recall and have been linked to at least 22 deaths around the world.
After more than a decade of recalls, lawsuits and a criminal investigation which drove Takata to bankruptcy, the deal ensures the Japanese company will be able to continue producing replacement inflators before winding itself down, which may take years.
The combined companies would be renamed Joyson Safety Systems, after a consortium led by KSS’s Chinese parent company, Ningbo Joyson Electronic Corp, provided funding to acquire most of Takata’s operations, Joyson Safety Systems said in a statement. The new company will be based in Michigan.
The acquisition will provide Joyson Safety Systems with additional manufacturing capability to compete with auto safety industry leaders Autoliv Inc and ZF TRW.
The agreement on Wednesday marks the denouement in the drawn-out demise of family-run Takata. Founded in 1933 as a textiles company specializing in parachute manufacturing, Takata at its peak was the world’s No. 3 air-bag maker and produced one-third of all seatbelts used in vehicles sold globally.
Most Takata air-bag inflators contain a chemical compound which could explode with excessive force, spraying shrapnel into vehicle compartments, which have been linked to numerous deaths and injuries, mainly in the United States.
The company has struggled to churn out replacement parts after a global recall of tens of millions of inflators. In 2017 it pleaded guilty to criminal wrongdoing over its inflators, including submitting false inflator test results to automaker clients to induce them to buy its defective products.
Read more at Reuters.