Japanese airbag maker Takata has filed for bankruptcy protection in Japan and the US.
The car parts maker has been in the midst of a global recall involving exploding airbags and listed liabilities topping $10bn over its defective airbags.
US based Key Safety Systems (KSS) has bought all of Takata's assets, aside from those relating to the airbags. It is expected those will be run by the reorganised Takata and "eventually will be wound down".
The $1.6bn (£1.3bn) deal was announced after the Japanese company filed for chapter 11 bankruptcy protection in the US, with similar action taken in Japan.
Takata's chairman and chief executive Shigehisa Takada, said KSS was the "ideal sponsor" as the company addresses costs related to airbag inflator recalls.
In a statement, KSS said the firms had reached an agreement in principle "to sponsor a restructuring plan for the purchase of substantially all of Takata's global assets and operations by KSS for an aggregate purchase price of $1.58bn".
Jason Luo, president chief executive of KSS, 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.
We look forward to finalising definitive agreements with Takata in the coming weeks, completing the transaction and serving both our new and long-standing customers while investing in the next phase of growth for the new KSS.
More than 100m cars with Takata airbags, including around 70m vehicles in the US, have been recalled since concerns started being flagged back in 2007.