Billionaire Carl Icahn sold Federal-Mogul to Tenneco Inc. for $5.4 billion.
Federal-Mogul, a century old supplier of automotive component with a storied past, is being sold to Tenneco Inc. as part of a deal valued at $5.4 billion.
In recent years, Federal-Mogul – owned by Wall Street financier Carl Icahn – has gone through multiple re-organizations but has maintained its core businesses of powertrain products aftermarket parts even as it struggled to pay its debts.
Icahn Enterprises will get $800 million in cash and 29.5 million shares of Tenneco stock. Tenneco will assume Federal-Mogul’s debt. The Lake Forest, Illinois-based auto parts maker said Tuesday that it will split the company into two parts, both to be traded publicly.
Tenneco one of the world’s leading designers, manufacturers and distributors of Ride Performance and Clean Air products and technology solutions for diversified markets expects the deal to close in the second half of 2018, subject to regulatory and shareholder approvals and other customary closing conditions.
(Gas prices on the rise as summer driving season nears. Click Here for the story.)
“This is a landmark day for Tenneco with an acquisition that will transform the company by creating two strong leading global companies, each in an excellent position to capture opportunities unique to their respective markets,” said Brian Kesseler, CEO, Tenneco, in a statement.
“Federal-Mogul brings strong brands, products and capabilities that are complementary to Tenneco’s portfolio and in line with our successful growth strategies. Unleashing two new product focused companies with even stronger portfolios will allow them to move faster in executing on their specific growth priorities.”
(Click Here for a closer look at the new 2019 Toyota Avalon.)
Tenneco expects to split its auto parts and powertrain technology wings into individual entities in the second half of 2019.
The sale brings to an end Icahn’s often-contentious two decades of control over the auto suppler. He first bought convertible bonds in Federal-Mogul in 2001 for $1.1 billion, and finally took the company private last year after buying the remaining 18% he did not already own.
(Fuel economy of new vehicles continues to drop. To find out why, Click Here.)
In addition to its headquarters in the Detroit suburbs, Federal-Mogul has 93 manufacturing and 17 distribution sites worldwide. It also has 53,000 employees globally. The company had global annual sales of $7.4 billion in 2015, according to its website.