Icahn Enterprises L.P. (NASDAQ:IEP) ("Icahn Enterprises") today
announced entrance into a definitive agreement to sell its indirect
wholly owned subsidiary Federal-Mogul LLC ("Federal-Mogul") to
Tenneco Inc. (NYSE:TEN) ("Tenneco") for $5.4 billion, comprised of
$800 million in cash and 29.5 million shares of Tenneco common
stock, of which 23.8 million shares will be non-voting shares that
will convert to voting shares if and when sold. There will be
restrictions on how much Tenneco stock can be sold within the first
150 days after the closing. Under the agreement, Tenneco can reduce
the amount of non-voting common stock by up to 7.3 million shares
and increase the cash consideration proportionately at the closing.
The voting and non-voting shares of Tenneco common stock will have
the same economic value. Tenneco will also assume all debt of
Federal-Mogul.
In connection with the sale, Tenneco announced
its intention to separate the combined businesses into two
independent, publicly traded companies through a tax-free spin-off
to its stockholders that will establish an aftermarket & ride
performance company and a powertrain technology company.
The sale is expected to close in the second half
of 2018, subject to regulatory approvals, approval by Tenneco
stockholders and other customary closing conditions, with the
separation anticipated to occur in the second half of 2019. The
sale is not subject to any financing condition.
Carl C. Icahn, Chairman of Icahn Enterprises,
stated: "Icahn Enterprises acquired majority control of
Federal-Mogul in 2008 when we saw an out-of-favor market
opportunity for a great company. During that time, we have built
one of the leading global suppliers of automotive products. 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. We expect to be
meaningful stockholders of Tenneco going forward and are excited
about the prospects for additional value creation. This transaction
is an excellent example of our general modus operandi at Icahn
Enterprises, by which we seek to acquire undervalued assets,
nurture, guide and improve their condition and operations, and
ultimately develop them into more valuable businesses, which
greatly enhances value for all shareholders."
Brian Kesseler, CEO of Tenneco, stated: “This is
a landmark day for Tenneco with an acquisition that will transform
the company by creating two strong leading global companies, each
in an excellent position to capture opportunities unique to their
respective markets. Federal-Mogul brings strong brands, products
and capabilities that are complementary to Tenneco’s portfolio and
in line with our successful growth strategies. Unleashing two new
product-focused companies with even stronger portfolios will allow
them to move faster in executing on their specific growth
priorities.”
Advisors
XMS Capital Partners is acting as exclusive
financial advisor and Winston & Strawn LLP is acting as legal
counsel for Icahn Enterprises and Federal-Mogul in connection with
the sale.
About Icahn Enterprises
L.P.
Icahn Enterprises, a master limited partnership,
is a diversified holding company engaged in ten primary business
segments: Investment, Automotive, Energy, Railcar, Gaming, Metals,
Mining, Food Packaging, Real Estate and Home Fashion.
About Federal-Mogul
Federal-Mogul, with revenue of $7.4 billion,
operates two independent divisions with its headquarters in
Southfield, Michigan and nearly 55,000 employees worldwide.
Federal-Mogul Powertrain designs and manufactures original
equipment powertrain components and systems protection products for
automotive, heavy-duty, industrial and transport applications.
Federal-Mogul Motorparts sells and distributes a broad portfolio of
products under many of the most recognized brands in the global
vehicle aftermarket, while also serving original equipment vehicle
manufacturers with products including braking, wipers and a range
of chassis components. The company's aftermarket brands include
ANCO®, Beck/Arnley®, BERU®*, Champion®, Interfil®, AE®, Fel-Pro®,
FP Diesel®, Goetze®, Glyco®, National®, Nüral®, Payen®, Sealed
Power® and Speed-Pro® engine products; MOOG®; and Abex®, Ferodo®,
Jurid® and Wagner® brake products and lighting.
About Tenneco
Tenneco is a $9.3 billion global manufacturing
company with headquarters in Lake Forest, Illinois and
approximately 32,000 employees worldwide. Tenneco is one of the
world’s largest designers, manufacturers and marketers of ride
performance and clean air products and systems for automotive and
commercial vehicle original equipment markets and the aftermarket.
Tenneco’s principal brand names are Monroe®, Walker®, XNOx™ and
Clevite®Elastomer.
Caution Concerning Forward-Looking
Statements
This release contains certain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, many of which are beyond our ability to control
or predict. Forward-looking statements may be identified by words
such as "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "estimates," "will" or words of similar meaning and
include, but are not limited to, statements about the expected
future business and financial performance of Icahn Enterprises L.P.
and its subsidiaries. Among these risks and uncertainties are risks
related to economic downturns, substantial competition and rising
operating costs; risks related to our investment activities,
including the nature of the investments made by the funds we
manage, losses in the funds and loss of key employees; risks
related to our automotive activities, including exposure to adverse
conditions in the automotive industry, and risks related to
operations in foreign countries; risks related to our energy
business, including the volatility and availability of crude oil,
other feed stocks and refined products, unfavorable refining margin
(crack spread), interrupted access to pipelines, significant
fluctuations in nitrogen fertilizer demand in the agricultural
industry and seasonality of results; risk related to our gaming
operations, including reductions in discretionary spending due to a
downturn in the local, regional or national economy, intense
competition in the gaming industry from present and emerging
internet online markets and extensive regulation; risks related to
our railcar activities, including reliance upon a small number of
customers that represent a large percentage of revenues and
backlog, the health of and prospects for the overall railcar
industry and the cyclical nature of the railcar manufacturing
business; risks related to our mining operations, including the
volatility of the global price of iron ore and global demand levels
for iron ore; risks related to our food packaging activities,
including competition from better capitalized competitors,
inability of its suppliers to timely deliver raw materials, and the
failure to effectively respond to industry changes in casings
technology; risks related to our scrap metals activities, including
potential environmental exposure; risks related to our real estate
activities, including the extent of any tenant bankruptcies and
insolvencies; risks related to our home fashion operations,
including changes in the availability and price of raw materials,
and changes in transportation costs and delivery times; and other
risks and uncertainties detailed from time to time in our filings
with the Securities and Exchange Commission. Past performance in
our Investment segment is not indicative of future performance. We
undertake no obligation to publicly update or review any
forward-looking information, whether as a result of new
information, future developments or otherwise.
Contact: Investor
Contact:SungHwan ChoChief Financial Officer(212) 702-4300
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