Tenneco buying Southfield-based Federal-Mogul in deal worth $5.4B
The debt-heavy auto parts company Federal-Mogul, based in Southfield and owned by Carl Icahn’s company, is being sold in a deal worth about $5.4 billion.
Icahn Enterprises will get $800 million in cash and 29.5 million shares from buyer Tenneco. The Lake Forest, Ill., auto parts maker said Tuesday that it will split the company into two parts, both to be traded publicly.
Tenneco expects the deal to close later this year and it plans to split the company’s auto parts and power train technology wings into individual entities in 2019.
It was not immediately clear what effect, if any, the sale would have on employees in Southfield. A message seeking comment was left for a Federal-Mogul representative.
In addition to its headquarters, 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.
Federal-Mogul notes on its website that it designs, engineers and makes a variety of products for its automaker and aftermarket customers:
“Our products include, but are not limited to, bearings, pistons, piston pins, rings and liners, valve seats and guides, valvetrain products, dynamic seals, hot and cold static gaskets and seals, liquid elastomer molded (LEM) seals, systems protection, friction products and aftermarket products (engine components, gaskets, antifriction bearings and seals, brakes, chassis, wipers, ignition and lighting).”
Icahn Enterprises bought a majority stake in Federal-Mogul in 2008 and took full ownership of the company last year.
Federal-Mogul has undergone significant changes in recent years. In 2014, the supplier said it was splitting into two companies. Federal-Mogul Motorparts would make and sell replacement parts, including brands such as Champion Spark Plugs and Anco wipers, and Federal-Mogul Powertrain would design and make components for automakers that improve fuel economy, reduce emissions and enhance performance, according to a report at the time.
And Icahn had predicted great things for Federal-Mogul.
“By separating the powertrain and motorparts divisions of Federal-Mogul, we are creating two independent, market-leading companies,” Icahn said then. “Upon separation both businesses will be well-capitalized and poised for stand-alone success.”
That 2014 story noted that Federal-Mogul emerged from bankruptcy in December 2007. The company’s offices are in the former home of Blue Cross Blue Shield of Michigan, which moved more than 3,000 employees to Detroit in 2012.
Posted By: Detroit Free Press on April 10, 2018. For more information, please click here to read the source article.
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