Bain Capital and PAG Asia Capital are evaluating bids for Takata Corp, joining KKR & Co among private equity firms with an interest in the Japanese air-bag supplier behind a record safety recall, people familiar with the matter said.
The discussions are at an early stage and may not lead to formal offers, the people said, asking not to be identified as the deliberations are private.
Takata’s most pressing issues are establishing the extent of its recall liabilities and persuading carmakers to continue doing business with the company, two aspects that will be key for potential buyers in weighing prospective bids, another person said.
Takata shares climbed 1.6 percent in Tokyo.
Takata appointed an external steering committee in February to draw up a restructuring plan for the company, which is facing billions of US dollars in recall costs, the majority of which are being borne by automakers. The five-member group, which is negotiating with carmakers on the sharing of the recall costs, last month hired Lazard to look for investors.
China’s Ningbo Joyson Electronic Corp (寧波均勝電子) is also paying close attention, though it has not had any substantial contact with Takata, spokesman Chen Yang (陳陽) said in an e-mail.
Joyson bought air-bag maker Key Safety Systems Inc headquartered in Sterling Heights, Michigan, for about US$920 million and on Thursday said their merger was completed.
Takata is aiming to complete the restructuring by fall and is open to the idea of a joint bid comprising a financial investor and a strategic partner, as automakers have expressed a preference for the new owners to have experience in manufacturing and quality control, according to two people.
Automakers are less likely to be interested in buying Takata, because the air-bag supplier sells to multiple carmakers, which would raise concerns about the safeguarding of commercially sensitive information, two people said.
At least 13 deaths, including 10 in the US, have been linked to defective Takata air-bag inflators that can deploy too forcefully, rupture, and spray plastic and metal parts at drivers and passengers. The number of air bags recalled may exceed 100 million worldwide after regulators’ latest demands for expansions in the US and Japan.
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