Tenneco, a global manufacturing company, said Tuesday it signed a definitive agreement to acquire Federal-Mogul, a global supplier for original equipment manufacturers (OEMs) and the aftermarket.
The company acquired Federal-Mogul from Icahn Enterprises L.P., the investing arm of billionaire investor Carl Icahn, for $5.4 billion through a combination of $800 million in cash, 29.5 million shares of Tenneco’s common stock and assumption of debt.
Tenneco said it intends to separate the combined businesses into two independent, publicly traded companies through a 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, with separation in 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, Tenneco’s CEO.
“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.”
Tenneco, a $9.3 billion manufacturing company with headquarters in Lake Forest, IL, is one of the world’s largest designers, manufacturers and marketers of ride performance and clean air products and systems.