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Takata Restructuring Delayed as Bidders Assess Business

Dec. 15, 2016
Shares of Takata have gained 49% in the past month on speculation the company could secure a buyer by the end of the year, though a new owner might not be named until the first quarter of 2017.

Takata Corp.’s selection of a bidder is running behind schedule as the shortlisted companies embark on a more thorough review of the airbag maker behind the biggest auto safety recall, according to people familiar with the matter.

The successful bidder might only be named some time in the January-to-March quarter, the people said, asking not to be identified as the negotiations are private. Takata and its financial adviser Lazard Ltd. have asked bidders to complete the due diligence in February, two of the people said. The Tokyo-based manufacturer said last month that it was working to find a buyer and finalize its restructuring plan by year-end.

Shares of Takata have gained 49% in the past month on speculation the company could secure a buyer by the end of the year. The airbag maker is leaning toward bids from Autoliv Inc. and Key Safety Systems Inc., people familiar with the matter have said. The two gained an edge because both have technical expertise in airbag systems and safety equipment, and because automakers view them as able to lower costs and improve the quality of Takata parts.

In the final round of due diligence, the shortlisted companies will have access to Takata’s detailed business data and technology plans, allowing them to refine their bids, one of the people said.

Representatives for Takata, Autoliv and Key Safety Systems declined to comment on the restructuring schedule. A representative for Lazard wasn’t immediately available for comment.

The eventual winner faces years of replacing Takata airbags linked to at least 17 deaths and more than 100 injuries. The buyer will potentially be on the hook for recall costs and other liabilities while having to ensure a stable supply of replacement parts to automakers.

Regulators have ordered recalls scheduled through at least 2019 that could eventually exceed 100 million airbags used by more than a dozen automakers, including Honda Motor Co., Volkswagen AG and General Motors Co.

By Ma Jie, Takako Taniguchi and Masatsugu Horie, with assistance from Yuki Hagiwara.

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