Tenneco Inc. said it reached a cash and stock deal to take over Federal-Mogul Llc, based in Southfield, Michigan, a developer and supplier of engines and parts with operations in the automotive and aerospace sectors. The acquisition of Icahn Enterprises LP's privately held subsidiary is planned to be partly funded with debt, according to the statements released on Tuesday. The ride control and elastomers producer with headquarters in Illinois said it expects the transaction to be executed by the end of the year.
The statement also reveals the intention to conduct a tax-free spinoff to shareholders of an aftermarket and ride performance entity and a powertrain technology company after the integration. Federal-Mogul has divisions for powertrains and motor parts. Billionaire Carl Icahn is the chairman of Icahn Enterprises.
The deal consists of $800 million in cash and 29.5 million shares of Tenneco common stock, of which 23.8 million shares will be nonvoting until converted to voting ones if and when sold. Restrictions were set at 150 days after closing. Tenneco can reduce the amount of nonvoting common stock by up to 7.3 million shares and increase the cash component proportionately.
