Chinese auto supplier Ningbo Joyson looking at investment in Takata
By Paul Lienert and Jake Spring DETROIT/BEIJING (Reuters) – Ningbo Joyson Electronic Corp, a major Chinese auto supplier, said it is looking at investing in Japan’s Takata Corp which has been searching for financial backers to help it face mounting recall costs over potentially deadly air bags.
The deepening recall crisis has sent Takata’s shares plummeting, making it an attractive acquisition target for investors who believe that the Japanese firm will continue to survive as the auto industry has found it difficult to procure sufficient air bag replacements elsewhere. KKR & Co and other potential investors are also in bailout talks with Takata, sources told Reuters last week. Bloomberg reported on Friday that Bain Capital and PAG Asia Capital were also interested in investing although discussions were at an early stage. Takata, Bain and PAG all declined to comment. Ningbo Joyson’s interest comes as it closed a $920 million deal on Thursday to acquire Michigan-based Key Safety Systems, the Chinese firm’s first foray into air bags and seatbelts, important sectors for Takata. Key Safety Chief Executive Jason Luo said his company and Ningbo Joyson were discussing a potential investment with Lazard – the investment bank Takata has hired to lead a financial restructuring with the aim of resolving its recall costs. Ningbo Joyson spokesman Chen Yang said the company was not yet considering an acquisition. “We don’t say it’s possible, also we don’t say it’s impossible, depends on the situation with Takata,” he said, adding that the company has not had any contact yet with the Japanese firm. Takata shares climbed 1.6 percent on Friday to give it a market value of around $340 million. The stock has lost 67 percent from a year earlier. More than 100 million vehicles worldwide have been recalled over faulty Takata airbag inflators that are linked to 13 deaths and more than 100 injuries, with new recalls being announced on a near weekly basis. If Takata was found to be solely responsible for the problem, it could face a recall bill of more than $10 billion, based on a rough calculation that each replacement kit costs around $100. Ningbo Joyson, which supplies both domestic and foreign manufacturers, produces a wide range of components from electronic control units to rear-view mirrors. The company has been expanding in the components sector since 2009 and has bought a plastics company in Shanghai and German automotive electronics supplier Preh. News of Joyson and Key’s interest in Takata was first reported on Thursday by Crain’s Detroit Business. (Reporting by Paul Lienert in Detroit and Jake Spring in Beijing; Additional reporting by Naomi Tajitsu in Tokyo; Writing by Ritsuko Ando; Editing by Eric Meijer and Edwina Gibbs)