Key Safety Systems (KSS), a global leader in mobility safety headquartered in Sterling Heights, Mich., and Takata Corporation, a leading global supplier of automotive safety systems such as seat belts, airbags and child seats, based in Tokyo, Japan, signed a definitive agreement under which KSS will acquire substantially all of Takata's global assets and operations for an aggregate purchase price of $1.588 billion (approximately ¥175 billion)*.
The definitive purchase agreement announced Nov. 21 is consistent with the memorandum of understanding announced by KSS and Takata on June 26, 2017. 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.
The transaction will position KSS to become a global leader in the automotive safety business with pro forma combined sales of approximately $7 billion (¥771 billion)* and roughly 60,000 employees in 23 countries. KSS plans to continue to support and utilize Takata's presence in Japan, and looks forward to working with all the Takata employees and manufacturing facilities in Japan and around the world.
Yuxin Tang, President of KSS, said: "The acquisition of Takata fits perfectly with KSS's century-long commitment to the automotive business. The combined company will enhance our ability to serve customers globally and provide superior products and innovation in the rapidly evolving auto safety industry. We enter this transaction in a spirit of partnership and anticipate executives and employees from both KSS and Takata together will play important roles – from initial integration through strategic execution. We look forward to completing the transaction and advancing the next phase of growth for the new combined company."
Shigehisa Takada, Chairman & CEO of Takata, said: "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. 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."
KSS will finance the deal using a combination of debt and equity.
The closing of this transaction, which is expected in the first quarter of 2018, is subject to certain conditions, including 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.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel, KPMG is serving as financial advisor, and Jefferies LLC is acting as lead financial advisor to KSS.
Nagashima Ohno & Tsunematsu and Weil, Gotshal & Manges LLP are serving as legal counsel to Takata. PricewaterhouseCoopers is serving as financial advisor, and Lazard is serving as investment banker to Takata.
*Exchange rate of US$1.00 = JP¥110.2 used throughout
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