Troubled Japanese air bag maker Takata Corp. is signing a signed a definitive agreement to sell most of its assets to a Chinese-owned rival.
Key Safety Systems of suburban Detroit will pay $1.6 billion in a deal expected to close early next year.
The companies reached an understanding on the sale in June. Key will get all Takata assets but those making replacement air bag inflators. Takata will continue to run those operations until they close.
Takata inflators can explode with too much force and spew shrapnel into drivers and passengers.
Much of the money will go to pay a $1 billion penalty from a U.S. criminal fraud case.
The deal is a key part of Takata's bankruptcy cases filed last summer in the U.S. and Japan.