Key Safety Systems (KSS) and Takata Corporation have signed a definitive agreement under which KSS will acquire most of Takata's global assets and operations for an aggregate purchase price of US$1.588bn.

Terms reportedly had been agreed early in October.

The agreement is consistent with the memorandum of understanding announced by KSS and Takata on 26 June, 2017. KSS will acquire "substantially all" of Takata's assets, except for certain assets and operations related to Takata's manufacturing and sale of phase-stabilised ammonium nitrate (PSAN) airbag inflators.  Those operations will be run by a reorganised Takata following the transaction closing and eventually will be wound down.

The transaction will position KSS to become a global leader in the automotive safety business with pro forma combined sales of approximately $7bn  and roughly 60,000 employees in 23 countries, the supplier said in a statement.

"KSS plans to continue to support and utilise Takata's presence in Japan and looks forward to working with all the Takata employees and manufacturing facilities in Japan and around the world."

Yuxin Tang, president of KSS, said: "The acquisition of Takata fits perfectly with KSS's century-long commitment to the automotive business. The combined company will enhance our ability to serve customers globally and provide superior products and innovation in the rapidly evolving auto safety industry. We enter this transaction in a spirit of partnership and anticipate executives and employees from both KSS and Takata together will play important roles – from initial integration through strategic execution. We look forward to completing the transaction and advancing the next phase of growth for the new combined company."

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Shigehisa Takada, chairman & CEO of Takata, said: "We are very pleased to have reached this agreement with KSS, which is an important step toward the consummation of our sale and achieving the objectives we identified at the outset of this process. Our top priorities continue to be providing a steady supply of products to our valued customers, including replacement parts for recalls, and a stable home for our exceptional employees.  We believe that the combined business will be well positioned for long-term success in the global automotive industry."

KSS will finance the deal using a combination of debt and equity.