Federal-Mogul Announces Plan to Split into Two Suppliers
Sept. 3, 2014—Federal-Mogul Holdings Corporation announced on Wednesday that it plans to separate its Powertrain and Motorparts divisions into two independent, publicly traded companies serving the global original equipment and aftermarket industries.
The planned separation will be implemented through a tax-free distribution of Federal-Mogul's Motorparts division to shareholders of Federal-Mogul Holdings Corporation.
"By separating the Powertrain and Motorparts divisions of Federal-Mogul we are creating two independent, market-leading companies that will be among the largest and strongest in their respective peer groups globally," said Carl Icahn, chairman of the board of Federal-Mogul Holdings Corporation. “Upon separation, the newly formed Federal-Mogul Motorparts will have a strong balance sheet with access to large amounts of capital enabling it to pursue synergistic acquisitions in the highly fragmented aftermarket industry. In addition, the remaining Federal-Mogul Powertrain business will benefit from enhanced management focus and the allocation of resources more directly aligned with its strategic priorities. Upon separation both businesses will be well-capitalized and poised for stand-alone success.”