DETROIT -- Key Safety Systems Inc. said it signed the long awaited definitive agreement to acquire Takata Corp. for $1.6 billion.
The Tuesday announcement comes weeks after the final paperwork for the deal was entered into U.S. bankruptcy court and unchanged from the two companies' memorandum of understanding signed in June.
The supplier -- based in suburban Detroit but controlled by China's Ningbo Joyson Electronics -- won a stalking horse bid to acquire the embattled Japanese supplier out of bankruptcy, which it filed earlier this year.
Takata's malfunctioning airbag inflators, which have sent shards of metal into drivers and passengers and are linked to at least 18 deaths globally, have plagued it 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, Mich.-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 vows to maintain Takata's 45,000-person employment base, with the exception of its problematic ammonium nitrate airbag inflator business, which is expected to end operation after the sale.
The deal was further complicated after Key Safety's CEO Jason Luo resigned in August to take the CEO position for Ford China. Yuxin Tang, member of Key Safety's board, assumed the role of interim president.
Key Safety will finance the deal using existing equity and debt. The deal still requires bankruptcy court approval and sign off from federal regulators, including the Committee on Foreign Investment in the U.S., which has to approve the deal because Key Safety is owned by a Chinese company.
The acquisition will make Key Safety one of the largest players in the safety market, with more than 60,000 employees in 23 countries and more than $7 billion in revenue.