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Takata is working on a restructuring plan and is said to be open to a sale to a private equity partner, a parts supplier or a combination. Photo: Reuters
Takata is working on a restructuring plan and is said to be open to a sale to a private equity partner, a parts supplier or a combination. Photo: Reuters

Chinese-owned Key Safety Systems said to plan bid for Takata

Key Safety Systems has received an invitation from Takata and will review the Japanese company's business operations to prepare for the bid

Tokyo: Key Safety Systems, the world’s fourth-largest air-bag maker that was acquired by a Chinese parts maker, is planning to bid for Japan’s Takata Corp., which is seeking buyers to overcome record recalls, according to a person familiar with the matter.

Key Safety Systems, which was bought by China’s Ningbo Joyson Electronic Corp. this year, has received an invitation from Takata and will review the Japanese company’s business operations to prepare for the bid, according to the person, who asked not to be named because the matter is private.

Takata is working on a restructuring plan and is said to be open to a sale to a private equity partner, a parts supplier or a combination. As many as 15 deaths, including 10 in the US, have been linked to defective Takata air-bag inflators that rupture and spray plastic and metal shards at drivers and passengers. Ruptures also have resulted in more than 100 serious injuries, according to the National Highway Traffic Safety Administration.

Takata is not in a position to comment as it has appointed an external committee to handle the restructuring plan, Takata spokeswoman Akiko Watanabe said by phone. Ningbo Joyson spokesman Chen Yang declined to comment.

Joyson bought Key Safety Systems for $920 million in cash from private-equity firms after US regulators fined Takata and ordered it to phase out the use of ammonium nitrate as a propellant. A successful acquisition of Takata will create the world’s No. 2 air-bag supplier by sales, behind Sweden’s Autoliv Inc., according to Valient Market Research. It will also broaden Joyson’s access to Japanese automakers led by Honda Motor Co.

Key Safety Systems supplies to BMW AG, Volkswagen AG, General Motors Co., Hyundai Motor Co. and Chinese automakers such as SAIC Motor Corp. and Great Wall Motor Co., according to Joyson’s annual report.

The company is planning to boost inflator production by more than 30 million units to about 100 million units by 2020, as it wins new customers, according to the company. It’s adding production lines at its plants in the US, China, Mexico and Europe as it forecasts revenue to expand by 50% by 2020.

Buyout firms including Bain Capital PAG Asia Capital and KKR Co. were said to have expressed interest in Takata. The air-bag company and its adviser, Lazard Ltd don’t plan to contact ZF-TRW and Autoliv Inc. because a deal may be difficult to pass due to antitrust concerns, Bloomberg reported this month. Bloomberg

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