Tenneco, designers, manufacturers and distributors of Ride Performance and Clean Air products and technology solutions for diversified markets, announced April 10 that it signed a definitive agreement to acquire Federal-Mogul, a global supplier to original equipment manufacturers and the aftermarket. Federal-Mogul is being acquired from Icahn Enterprises L.P. for a total consideration of $5.4 billion to be funded through cash, Tenneco equity and assumption of debt.
Tenneco also announced its intention to separate the combined businesses into two independent, publicly traded companies through a tax-free spin-off to shareholders that will establish an aftermarket and ride performance company and a powertrain technology company.
The acquisition is expected to close in the second half of 2018, subject to regulatory and shareholder approvals and other customary closing conditions, with the separation occurring in the second half of 2019.
“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. “Federal-Mogul brings strong brands, products and capabilities that are complementary to Tenneco’s portfolio and in line with our successful growth strategies.
“Icahn Enterprises acquired majority control of Federal-Mogul in 2008 when we saw an out-of-favor market opportunity for a great company,” said Icahn in the release. “During that time, we have built one of the leading global suppliers of automotive products.
Upon completion of the acquisition, Tenneco will operate the combined businesses under a structure designed to begin concurrently the successful integration of Tenneco and Federal-Mogul and the separation of the aftermarket and ride performance and the powertrain technology companies.
According to Dan Frey, human resources manager for Federal-Mogul in Frankfort, for now it’s business as usual at the west side manufacturing facility. Frey said expectations are that the deal will close by the end of the year. No specific changes, if any, at the Frankfort location have been discussed.