Global automakers are expected to descend on Tokyo at the end of the month to decide the fate of embattled supplier Takata Corp.
Executives from customers, including General Motors Co. and Ford Motor Co., will review offers from several bidders for the company, which is responsible for the largest recall in automotive history, according to a source familiar with the bidding.
Suitors for the Tokyo-based supplier of seatbelts and airbags include Sterling Heights, Mich.-based competitor Key Safety Systems Inc.; private equity firm KKR & Co.; Daicel, a Japanese manufacturer of airbag inflators that's jointly bidding with private equity firm Bain Capital; Urbana, Ill.-based supplier Flex-N-Gate and Swedish airbag maker Autoliv Inc., according to Bloomberg reports and the source familiar with the matter.
The automakers and Takata leadership will review the proposals in an effort to find the best possible match for the industry as Takata prepares to sell off its business, the source said, in light of a multibillion-dollar recall disaster.
The group will identify a smaller list of finalists for the final round of bidding, the source said.
Takata uses a range of plastics in functional parts as well as latches for seat belts and several components in air bags. Some of the suiters, such as Flex-N-Gate and Key Safety Systems, already have plastics expertise and production in house.
While the acquisition of Takata doesn't need formal approval from the automakers, they have a vested interest in ensuring the buyer can continue to provide the industry with the airbags needed to keep production lines moving — and any buyer would want assurances the automakers would remain customers.
Bids include the use of bankruptcy protection to mitigate the liabilities, Bloomberg reported.
Representatives from Key Safety Systems and Autoliv declined to comment.
It's unclear whether Autoliv would pass antitrust regulations. It controlled 41 percent of the global airbag market in 2015. Autoliv has already ramped up airbag production in the wake of the Takata recall.
Key Safety, which controls currently controls 8 percent of the airbag market, would grow to between 20 percent or 30 percent with the acquisition of Takata.
It has also accelerated production of both front and side airbag inflators at plants in Florida and China by more than 5 million units annually to accommodate customers moving away from Takata's airbags.
Takata is currently 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 13 deaths and more than 100 injuries. The airbags reportedly can explode, shooting shrapnel into the cockpit, injuring passengers.
Takata hired investment bank Lazard Ltd. to lead a financial restructuring in an effort to reduce the impact of the recalls. Takata estimated the recalls would cost the company more than $24 billion, Bloomberg reported in March.
GB 8410-Flammability Test to Motor Vehicle – Chinese Standard