Tenneco Inc. and Icahn Enterprises L.P. announced the completed acquisition of Federal-Mogul LLC by Tenneco for $800 million USD in cash and 29.5 million shares of Tenneco common stock.

“Today marks an important step for Tenneco as we progress toward the transformation of our company into two strong, leading global businesses with the scale and financial flexibility to drive long-term value creation,” said Brian Kesseler, co-CEO, Tenneco.

The transformational acquisition, which was first announced in the second quarter of 2018, accelerates long-term value creation by creating two product-focused, purpose-built industry leaders in their respective markets with greater scale, and strategic and financial flexibility. Today’s closing precedes the planned separation of the combined businesses into two independent, publicly traded companies through a tax-free spin-off to shareholders that will establish an Aftermarket and Ride Performance company and a Powertrain Technology company. The spin-off is expected to be complete in late 2019.

“This transaction makes possible the ability to create two new product-focused companies with even stronger portfolios positioned to capture unique opportunities in their respective markets,” said Roger Wood, co-CEO, Tenneco. “Now that we have completed the acquisition, we look forward to accelerating the successful realignment of the businesses and creation of the new companies.”

Carl C. Icahn, Chairman of Icahn Enterprises, stated: “Icahn Enterprises acquired majority control of Federal-Mogul in 2008 when we saw an out-of-favour market opportunity for a great company. During that time, we have built one of the leading global suppliers of automotive products. 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.”

Cash consideration of $800 million was financed through a new senior credit facility that will replace Tenneco’s existing senior credit facilities and certain senior facilities of Federal-Mogul LLC. The new senior credit facility consists of a $1.7 billion term loan A, a $1.7 billion term loan B and a $1.5 billion revolving credit facility.

The company also announced the expansion of its board of directors from 10 to 11 members and the election to the board of directors of Mr. Keith Cozza, President and CEO, Icahn Enterprises L.P., effective October 1, in accordance with the terms of the Federal-Mogul purchase agreement.