A United States investment firm and a Japanese chemical company have teamed in an attempt to buy beleaguered airbag maker Takata Corporation.
Boston-based Bain Capital and Japan’s century-old Daicel Corp have emerged as top contenders for Takata, says the Wall Street Journal (WSJ) newspaper.
Japan’s Takata is seeking a lifeline after it recalled tens of millions of airbags. The airbags can explode and spray shrapnel in vehicle cabins, a problem linked to more than a dozen deaths and more than 100 injuries worldwide.
The recall is the largest in automotive history and may affect up to 70 million vehicles, among them 300,000 or so in New Zealand. automotivenews.co.nz warned in July 2014 of the problem for this country.
A steering committee named by Takata is organising an auction for the company. Its market capitalisation has plummeted in a little over two years from a high of US$2.7 billion to below US$300 million. US federal regulators warned in June 2014 that Takata-made airbags could explode.
The committee is weighing a US bankruptcy filing as one option for addressing recall costs and clearing a path for outside investors, said the WSJ, citing unnamed sources.
The Bain-Daicel offer is about US$3.5 billion and one of five bids that cleared the first round, said the newspaper. It exceeds other bids ranging from US$1.2 billion to US$2.3 billion. The WSJ said the committee aims to narrow down the list to two by mid-November and select a finalist by December.
Takata’s business is attractive for a variety of industry players, particularly Daicel, which already supplies inflaters for Takata airbags and fears losing out on the business if it loses the auction, said the WSJ.
A particular threat for Daicel is Sweden’s Autoliv Inc., a major airbag maker that has also submitted a bid for Takata. But the steering committee is leaning toward the Bain-Daicel bid, not only because of its higher price tag but also because the Bain-Daicel team is seen as more willing to keep Takata’s business intact, the WSJ said.
Daicel supplies airbag inflaters to Takata and Toyoda Gosei, a parts supplier for Toyota Motor Co. Daicel says it is churning out millions of airbag modules for replacement products owing to the Takata recalls.
Even before the recall, Daicel had hitched itself to Takata as a way to bring its products to companies outside of Japan. That partnership helped Daicel become a major player in the inflater business. In 2012, Daicel bought Special Devices Inc, a US-based airbag component maker, for an undisclosed sum.