As Autoliv Inc. Chairman and CEO Gunnar Bark fastened the seat belt in his host's corporate jet, he settled in for a turbulent ride.
By 1996, falling airbag prices were squeezing the Stockholm, Sweden-based supplier's profits. To protect Autoliv's earnings, Bark knew the company would have to grow quickly.
Morton International Inc. was a tempting acquisition target. But Bark's airborne host, Morton Chairman S. Jay Stewart, had rejected his proposals for such an alliance the year before.
This time, it was Stewart who requested a meeting. Like Bark, Stewart had his own troubles. Morton had enjoyed little success expanding into Europe, Autoliv's home turf.
Moreover, the pool of possible merger partners was dwindling, and automakers were pressuring Morton for price cuts. In short, both Bark and Stewart were eager for a merger.
It was an audacious concept. Together, the two companies would generate $3 billion in sales, with operations on nearly every continent. A merger would create the world's largest maker of airbags and seat belts.
Bark was a cautious man, and the deal dwarfed any previous acquisition the 58-year-old Swede had undertaken. But he knew he needed a foothold in North America. And Morton International's giant Automotive Safety Products group was the logical choice.
'It was a perfect fit,' Bark recalled later. 'It would not have been very intelligent to let the bird fly away... Doing anything less was a risky venture.'
Morton, based in Ogden, Utah, had a strong presence in North America and Japan. Most of Autoliv's business was in Europe, where it accounted for 40 percent of total airbag sales. Autoliv was strong in seat belts; Morton didn't make them. Morton was a leading maker of airbag inflators, while Autoliv couldn't make enough.
But Bark encountered a resourceful adversary: Fred Musone. Named president of Morton's safety group in 1995, Musone was in no hurry to see his own division sold to help Autoliv.
He had managed to cut Morton's manufacturing costs faster than the Big Three could cut his prices, confounding Wall Street analysts who said he couldn't do it.
Still, Morton lacked a full range of safety products. In 1997, Musone changed his mind. He urged Stewart to call Bark. 'Long-term, you need a partner,' he advised.
Negotiations were smooth; Bark and Stewart got along well. Price was the only sticking point. Arguing for a premium, Musone contended that his manufacturing prowess could boost profits. The Swedes felt Musone was too optimistic.
In the end, Musone prevailed. Morton received $750 million. But Autoliv's Bark became a global player at a price that did not jeopardize his balance sheet.