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KSS buys airbag maker Takata for $1.6 billion

Reuters TOKYO (Reuters) — Auto components maker Key Safety Systems on Wednesday completed its $1.6 billion deal to acquire airbag maker Takata Corp., whose inflators triggered the auto industry’s biggest recall and have been linked to at least 22 deaths around the world.

After more than a decade of recalls, lawsuits and a criminal investigation, which drove Takata to bankruptcy, the deal ensures the company will be able to continue producing replacement inflators before winding itself down, which may take years.

The combined companies would be renamed Joyson Safety Systems, after a consortium led by KSS’s Chinese parent company, Ningbo Joyson Electronic Corp., provided funding to acquire most of Takata’s operations, Joyson Safety Systems said in a statement. The new company will be based in Michigan.

Takata was once the world’s No. 3 airbag maker and also produced seat belts, steering wheel systems and child seats.

The acquisition will provide Joyson Safety Systems with additional manufacturing scale to compete with auto safety industry leaders Autoliv Inc. and ZF TRW.

It excludes Takata’s liabilities related to its faulty inflators, and leaves the company, restructured as part of U.S. and Japanese bankruptcy proceedings, responsible for those operations.

Takata airbag inflators contained a chemical compound that could explode with excessive force, spraying shrapnel into vehicle compartments.

The company has struggled to churn out replacement parts after a global recall of tens of millions of inflators.

A U.S. court in February approved Takata’s Chapter 11 bankruptcy filing, under which the company’s U.S. subsidiary agreed to set up a victims compensation fund and repay automaker creditors only a tiny portion of its unsecured claims.

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