Icahn: Worth $16.6 billion

Investor Carl Icahn will pocket $800 million in cash and $4.6 billion worth of Tenneco Inc. stock in the deal announced last week to sell his privately owned parts and aftermarket supplier, Federal-Mogul, to the Chicago maker of Walker exhaust systems and Monroe shocks.

But the real money could come next year, when the newly merged suppliers regroup and de-merge into two new companies.

Tenneco’s plan is to take the powertrain components business of Federal-Mogul, combine it with Tenneco’s clean-air parts business, and spin the entity off as a new supplier with sales of $10.7 billion, according to materials presented to investors last week.

The combined businesses will offer a portfolio of engine-to-tailpipe products and system solutions, Tenneco CEO Brian Kesseler told analysts last week. “The combination of capabilities offers our customers more options on how to efficiently improve fuel economy and meet regulations,” he said.

What will remain after the spinoff would consist primarily of Federal-Mogul’s aftermarket and brake-parts business, plus Tenneco’s suspension products — a company with global sales of $6.7 billion, based on current activity levels.

The deal is the culmination of years of big-picture maneuvering at Federal-Mogul, ranked No. 45 on Automotive News‘ list of the 100 largest global parts suppliers to automakers.

The company owns multiple auto parts brands, including Champion spark plugs, Beru glow plugs, Anco, Fel-Pro and MOOG.


Read more >