Auto components maker Key Safety Systems finished on Wednesday a $1.6 billion deal to acquire air-bag maker Takata Corp, whose faulty inflators caused the auto industry’s biggest recall and have been connected to at least 22 deaths across the world.
After over than a decade of recalls, lawsuits and a criminal investigation which resulted Takata to bankruptcy, the deal guarantees the Japanese company will be able to keep producing replacement inflators before winding itself down, which may take long.
The combined companies would be renamed Joyson Safety Systems, after a consortium led by KSS’s Chinese parent company, Ningbo Joyson Electronic, offered funding to acquire most of Takata’s operations, Joyson Safety Systems stated. The new company will be based in Michigan.
The acquisition will offer Joyson Safety Systems with extra manufacturing capability to contend with auto safety industry leaders Autoliv Inc and ZF TRW.
The agreement on Wednesday accomplishes 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 best time was the world’s No. 3 air-bag maker and manufactured one-third of all seatbelts used in vehicles sold worldwide.
Most Takata air-bag inflators have a chemical compound which could explode with extreme force, spraying shrapnel into vehicle compartments, which have been connected to numerous deaths and injuries, mostly in the United States.