DETROIT -- Key Safety Systems Inc. reached a final deal worth nearly $1.6 billion to acquire embattled Japanese airbag supplier Takata Corp. out of bankruptcy resulting from exploding airbag system parts linked to at least 17 deaths.
A court filing made late Friday says Key Safety and Takata have completed a series of agreements across the globe that clear the way for the deal to close. Takata also filed its final reorganization plan with the court. They also said Takata's customers have signed off on the agreement. They still need bankruptcy court approval.
The companies say the deals provide for continued employment for all of Takata's current employees and enables them to comply with regulatory issues tied to the recalls of Takata's exploding airbag inflators.
The acquisition will make Key Safety of Sterling Heights, Mich., one of the largest players in the automotive safety market, with more than 60,000 employees in 23 countries and more than $7 billion in revenue. The deal would be worth $1.588 billion, according to the Friday court filing. The companies reached a tentative deal for the acquisition in June.
The negotiations to make that happen have been highly complex because of the airbag scandal and because Takata does business in so many countries. They were further complicated by the August departure of Key Safety CEO Jason Luo, who became the chairman and CEO of Ford China. Since then, Key Safety Director Yuxin Tang has led the company with help from a transition committee of Key Safety executives.
The filing says the companies expect to receive bankruptcy court approval for the deal by Dec. 6 and close it by Feb. 27.
Key Safety, which makes airbag and seat belt systems, is an independently operated subsidiary of Chinese supplier Ningbo Joyson Electronic Corp. The Takata purchase is seen as giving Key Safety and its Chinese parent company a jump start into new segments with a deep customer base.
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While Takata's market share for airbag inflators has plummeted — analysts project it to drop to 5 percent in 2020 from 22 percent in 2015 — competitors Autoliv, Daicel, ZF TRW and Key Safety have picked up the slack. Key Safety plans to boost inflator production by more than 30 million units to about 60 million by 2020. That may grow with the addition of Takata.
Takata's malfunctioning airbag inflators, which have sent shards of metal into drivers and passengers, have plagued the company for more than eight years.
With pressure mounting, the 84-year-old Takata filed for bankruptcy protection in Japan, and its U.S. subsidiary, Auburn Hills-based TK Holdings Inc., filed for Chapter 11 protection in Delaware on June 25 in a prepackaged agreement to sell to Key Safety, which beat out nearly a half-dozen competitors.
Under the deal, Key Safety's management has vowed to maintain Takata's 45,000-person employment base, with the exception of the troubled ammonium nitrate airbag inflator business, which is expected to end operation after the sale.