Sterling Heights, Mich.-based Key Safety Systems Inc. and automotive safety supplier rival Autoliv Inc. are the final two bidders for troubled Takata Corp., a source familiar with the deal confirmed to Crain's Detroit Business.
After meetings in New York with Takata's financial adviser Lazard Inc. earlier this month, Takata and its customers chose the two suitors over competing bids from Flex-N-Gate Corp. and Daicel Corp., which is bidding together with Bain Capital LP.
The timeline to choose the winning suitor is unknown, but could happen within weeks, the source told Crain's Detroit Business. CDB is a sister publication of Plastics News.
Autoliv is the largest automotive-safety parts company in the world with headquarters in Stockholm. It supplies seatbelts, steering wheels and airbags to virtually every major manufacturer. Key Safety was acquired by China's Ningbo Joyson Electronic Corp. for $920 million in June.
Seat belts and airbags both use a variety of plastics, both in housings and functional components.
The bids, all of which fall in the range of $1 billion to $2 billion, include the use of Chapter 11 bankruptcy protection in the U.S. It's unclear whether the Japanese business unit would also file for bankruptcy in Japan. The concern is whether Takata's new owner and its customers can indemnify themselves from the massive liability costs attached to Takata's faulty airbags, which are estimated at more than $24 billion.
Takata, whose subsidiary TK Holdings Inc. is in Auburn Hills, Mich., is floundering under the biggest recall in automotive history. As many as 100 million vehicles worldwide may ultimately be recalled due to faulty Takata airbag inflators linked to 16 deaths and more than 100 injuries. The airbag inflators reportedly can explode, shooting shrapnel into the vehicle's interior.
In September, Takata sold its Pontiac, Mich.-based interiors subsidiary, Irvin Automotive Inc., to Redford Township, Mich.-based Piston Group for $175 million.