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Tenneco, Federal-Mogul deal close to completion

MILAN, Ohio — Tenneco Inc. still is in the process of closing its acquisition of Federal-Mogul L.L.C., which was announced in April.

The $5.4 billion deal is expected to close in the second half of 2018, Ben Patel, Tenneco chief technology officer, said during an event at the firm’s technical center in Milan. Once gathered into a $17.1 billion company, the plan is to combine the four business units of the two companies into two pairs. One pair will spin off as a new company, and the other will form a separate, single company.

One company will focus on aftermarket and ride performance products, and the other on powertrain technology, he said.

“The reason we’re doing that is to be really clear about the commitments and investment profile that the powertrain side of the business is going to be able to make because they’re dedicated,” Mr. Patel said.

“Today, Federal-Mogul is selling a lot of powertrain components, pistons, rings, valves, liners, various things on the engine. We are selling all of the exhaust and aftertreatment systems. When you think about it, very complementary components.”

The future powertrain business will be holistic around emission control of both criteria pollutants and carbon dioxide, by way of fuel economy, Mr. Patel said.

“From problem-solving in terms of human health, in terms of climate risk, it’s going to be a great story,” Mr. Patel said.

The aftermarket ride performance company likely will be the new company spun off after the close of the acquisition, Mr. Patel said. That business will be a combination of Clevite’s ride performance business and Federal-Mogul’s motor parts aftermarket business, which will create a larger portfolio of brands. That larger company will be about 60 percent aftermarket and 40 percent original equipment business.

As the deal is still in progress, no details were shared about branding or other structure plans.

The new company likely will be spun off sometime in the second half of 2019, Mr. Patel said.

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