Federal-Mogul Holdings Corporation agreed to be merged with a subsidiary of Icahn Enterprises L.P., the portfolio controlled by investor Carl Icahn. The Icahn group already is the largest shareholder in Federal-Mogul; its all-cash offer of $9.25/share for all outstanding of the automotive powertrain and after-market products manufacturer is estimated to be worth about $282 million, based on the number of outstanding shares.
The transaction has been approved unanimously approved by directors of both companies, and is structured as a tender offer to be followed by a merger.
Once the transaction is complete, Federal-Mogul will be an indirect, wholly owned subsidiary of Icahn Enterprises, and a privately held company.
Currently, Federal-Mogul Holdings consists of two operating units: Federal-Mogul Powertrain, a designer and manufacturer of powertrain components to original equipment manufacturers, including pistons, piston rings, cylinder liners, valve seats, valve guides, bearings, spark plugs, with about 70 plants and 12 engineering centers around the world; and Federal-Mogul Motorparts, which produces and distributes more than 20 brands of automotive aftermarket wiper blades, spark plugs, wipers and filters; engine products; steering and suspension parts; and brake products.
A plan to spin off the Motorparts division to Federal-Mogul shareholders was canceled earlier this year.
Icahn Enterprises L.P. is a holding company with businesses in a wide range of industries, including automotive parts. Among its holdings are the Pep Boys and Auto Plus auto service and retail chains, suggesting a synergistic value to Federal-Mogul after-market products.