Nov. 21, 2017—Takata Corporation announced that it has signed a definitive asset purchase agreement with Key Safety Systems (KSS), which will acquire substantially all of Takata’s global assets and operations for an aggregate purchase price of $1.588 billion.
The definitive asset purchase agreement is consistent with the agreement in principle announced by KSS and Takata on June 26.
Specifically, under the agreement, KSS will acquire substantially all of Takata’s assets, except for certain assets and operations related to Takata’s manufacturing and sale of phase-stabilized ammonium nitrate (PSAN) airbag inflators.
Takata’s PSAN-related operations will be run by reorganized Takata following the transaction closing and eventually will be wound down.
Takata will continue to produce airbag inflator replacements to meet demands without interruption.
“We are very pleased to have reached this agreement with KSS, which is an important step toward the consummation of our sale and achieving the objectives we identified at the outset of this process," said Shigehisa Takada, chairman and CEO of Takata. "Our top priorities continue to be providing a steady supply of products to our valued customers, including replacement parts for recalls, and a stable home for our exceptional employees. We believe that the combined business will be well positioned for long-term success in the global automotive industry.”
Takata has filed final forms of all definitive transaction documents in the U.S., including its Chapter 11 plan in the U.S., as well as certain restructuring support agreements pursuant to which Takata, KSS, and a significant group of Takata’s OEM customers have committed to support the Global Transaction.
The closing of the transaction is subject to bankruptcy court approval in both Japan and the United States, consenting OEM agreements and customer documentation, receipt of regulatory approvals and other customary closing conditions.
The transaction is expected to close in the first quarter of 2018.
Takata intends to use the proceeds from sale to meet requirements of plea agreement with U.S. Department of Justice, to satisfy administrative costs and expenses of the restructuring, and to fund unsecured creditor recoveries.
The company continues to work through proceedings under the Civil Rehabilitation Act in Japan and the Chapter 11 process in the U.S., under which the sale transaction is expected to be completed in the first quarter of 2018.