April 10, 2018—Tenneco announced today it has signed a definitive agreement to acquire Federal-Mogul from Icahn Enterprises L.P. for cash and stock worth about $5.4 billion.
Federal-Mogul’s products include brake parts, wipers and chassis components. In 2008, billionaire investor Carl Icahn acquired majority control of the company through Icahn Enterprises. Last year he acquired 100 percent of the company, and took it private.
Tenneco intends to separate the combined businesses into two independent, publicly traded companies. One company will focus on aftermarket and ride performance products, while the other will be geared toward powertrain technology.
The acquisition is expected to close in the second half of 2018, subject to regulatory and shareholder approvals, with the separation occurring in the second half of 2019.
“I am very proud of the business we have built at Federal-Mogul and agree with Tenneco regarding the tremendous value in the business combination and separation into two companies,” Icahn said in a statement. “We expect to be meaningful stockholders of Tenneco going forward and are excited about the prospects for additional value creation.”
This is notable because, as Ratchet+Wrench reported last year when Icahn Automotive Group acquired 250 Precision Tune Auto Care locations (giving it control of more than 1,000 auto repair shops), Icahn was practicing vertical integration by engaging multiple segments of production. Those 1,000 shops would buy their products from the Icahn-owned Auto Plus, which would buy its parts from the Icahn-owned Federal-Mogul, stretching Icahn’s pull in the marketplace.
