Tenneco To Acquire Federal-Mogul In $5.4 Bln Deal - Quick Facts

(RTTNews) - Tenneco (TEN) announced it has signed a definitive agreement to acquire Federal-Mogul, a global supplier to original equipment manufacturers and the aftermarket. Federal-Mogul is being acquired from Icahn Enterprises L.P. Tenneco also announced its intention to separate the combined businesses into two independent, publicly traded companies through a tax-free spin-off to shareholders that will establish an aftermarket & ride performance company and a powertrain technology company.

Tenneco will acquire Federal-Mogul for $5.4 billion through a combination of $800 million in cash, 5.7 million shares of Tenneco Class A common stock (representing a 9.9% voting interest), 23.8 million shares of Non-Voting Class B common stock and assumption of debt. Under the agreement, Tenneco can reduce the number of shares of Class B Non-Voting common stock by up to 7.3 million shares and increase the cash consideration proportionately at the closing.

The acquisition is expected to close in the second half of 2018, subject to regulatory and shareholder approvals and other customary closing conditions, with the separation occurring in the second half of 2019.

Tenneco said the company has put in place committed debt financing to fund the transaction, which will replace its existing senior credit facilities and certain senior facilities at Federal-Mogul. Tenneco expects the acquisition to be value accretive and generate synergy opportunities of at least $200 million in annual earnings and $250 million in working capital.