Takata Up For Sale; Taking Bids Today
It comes as no surprise that Takata Corp, the company in the middle of the global airbag recall storm is putting itself up for sale / rescue.
According to Reuters and Bloomberg, the Tokyo-based company will take initial bids today (19 September 2016) from 7 potential buyers, including Daicel Corp (a Japanese chemical maker which supplies inflators to Takata) in a joint bid with Bain Capital, Ningbo Joyson Electronic (the China parent of American-based airbag maker Key Safety Systems), and KKR & Co (a global investment fund). The bidders are expected to present their plans to Lazard Ltd (the advising bank) today and a shortlist of 2 – 3 potential buyers should be ready by October. It is said that there were as many as 30 interested parties in June but its reported that Lazard will only be accepting bids from 7 in a private process.
With its stock price plunging nearly 90% since 2014 and its potential of facing billions of dollars in liabilities arising from the global airbag recall which will go on for the next few years, Takata is in dire need of financial support. Why not let the company go under or put it out to pasture and let other airbag manufacturers take over its market share? It isn’t that simple. Firstly, Takata still needs to supply replacement airbag kits for the recall and secondly, Takata is one of only 3 dominant airbag makers supplying to the global market and as many as 10 automakers rely on Takata’s supply.
