Fed Mogul Powertrain engine

Tenneco Buying Federal-Mogul for $5.4B

April 10, 2018
Cash/stock deal involves plan to split, then spin off the Powertrain and Motorparts businesses

Icahn Enterprises L.P. struck a deal to sell automotive supplier Federal-Mogul LLC to Tenneco Inc. for $5.4 billion, a cash and stock deal. Tenneco, which has a similar organization that manufactures parts and systems for automotive OEMs as well as aftermarket products, plans to split Federal-Mogul into two businesses and then spin-off each one as a separate, listed organization.

Currently, Federal-Mogul operates as two independent divisions, Federal-Mogul Powertrain and Federal-Mogul Motorparts. Federal-Mogul Powertrain designs and manufacturers engine bearings, connecting rods, pistons, piston pins, piston rings, cylinder liners, valve seats and guides, spark plugs, ignition coils, and transmission products.

Federal-Mogul Motorparts produces and distributes numerous brand-name products for vehicle aftermarkets, including ANCO wiper blades; Champion spark plugs, wipers and filters; BERU glow plugs; AE, Fel-Pro, Goetze, Nural, Glyco and Payen engine products; MOOG steering and suspension parts; and Ferodo and Wagner brake products.[3]

The deal reportedly will see Tenneco pay $800 million in cash plus 29.5 million shares of its own common stock, 23.8 million shares of which will be non-voting shares that will become voting shares as soon as they are sold.

Reportedly, Tenneco’s own stock sales will be restricted for up to five months after the closing.

Icahn Enterprises acquired Federal-Mogul Holdings Corp. in 2016, paying an estimated $282 million to acquire all outstanding shares and privatize the company in which it already had been the largest shareholder.

"Icahn Enterprises acquired majority control of Federal-Mogul in 2008 when we saw an out-of-favor market opportunity for a great company,” commented Carl C. Icahn, chairman of Icahn Enterprises. “During that time, we have built one of the leading global suppliers of automotive products."

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