Embattled Japanese auto parts manufacturer Takata said Monday it has filed for bankruptcy protection.
Takata also announced that rival Key Safety Systems is purchasing Takata for $1.5 billion.
Takata has been overwhelmed with the costs of lawsuits and recalls related to defective airbags linked to the deaths of 16 people and scores of injuries worldwide.
The defective airbags led to a global recall of tens of millions of automobiles. The chemicals that power the airbags were found to deteriorate spontaneously with prolonged exposure to high humidity, causing the airbags to deploy far more forcefully than normal and sending metal and plastic shrapnel into drivers and passengers.
Takata has already agreed to pay a billion-dollar fine to settle with U.S. safety regulators. Former U.S. Transportation Secretary Anthony Foxx has said that Takata engaged in a pattern of “delay, misdirection and refusal to acknowledge the truth.”
Jason Luo, president and CEO of Key Safety Systems, said, “Although Takata has been impacted by the global airbag recall, the underlying strength of its skilled employee base, geographic reach, and exceptional steering wheels, seat belts and other safety products have not diminished.”
The Tokyo Stock Exchange suspended trading of Takata shares Monday and said it would delist Takata stock Tuesday.