Tenneco Acquires Federal-Mogul in USD 5.4 Million Deal

Tenneco has announced that it would be acquiring its rival, Federal-Mogul in a USD 5.4 million deal from Icahn Enterprises L.P., the parent company of Icahn Automotive Group LLC. After the deal is completed, Tenneco plans to split Federal-Mogul into two separate entities, is selling Federal-Mogul LLC to Tenneco Inc. for $5.4 billion. Tenneco plans to split Federal-Mogul into two separate, publicly traded entities – one of which will deal with powertrain technology and the other will deal with aftermarket and ride performance.

As part of the deal, Tenneco will give USD 800 million in cash, and 29.5 million shares of Tenneco common stock to Icahn Enterprises. Of these shares, 23.8 million shares will be non-voting shares that will be converted to voting shares if and when sold. There will also be restriction on the sale of Tenneco shares within the first 150 days after the closing. As part of the deal, Tenneco will also take on all the debt of Federal-Mogul.

It is expected that the deal will be finalized in the second half of 2018, pending approval of the Tenneco shareholders and regulatory authorities.

Commenting on the deal, the chairman of Icahn Enterprises, Carl Icahn said that he had acquired majority control of Federal-Mogul in 2008 and went on to transform the company into one of the leading global suppliers of automotive products.

Icahn specializes in acquiring stressed companies and unlocking value by improving their condition.
Tenneco CEO Brian Kesseler said that the acquisition of Federal-Mogul will transform the company by creating two strong leading global companies, each of which is in an excellent position to capitalize on the opportunities that are available in their respective markets. He said that Federal-Mogul has strong brands, products and capabilities which complement Tenneco’s portfolio and are in line with the company’s growth strategies.