Carl Icahn's Payoff from Federal-Mogul Could Increase by Billions in 2019

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April 20, 2018—Investor Carl Icahn will gain $800 million in cash and $4.6 billion worth of Tenneco Inc. stock in the deal announced last week to sell Federal-Mogul LLC, to the Chicago maker of Walker exhaust systems and Monroe shocks.

But Icahn’s real money could come in 2019, when the newly merged suppliers regroup and de-merge into two new companies, Tire Business reports.

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.

Last year his Icahn Enterprises paid $300 million to take 100 percent control of the parts company in which it already owned the majority. Icahn also is a large investor in ride-hailing company Lyft Inc., has a controlling interest in Hertz Global Holdings Inc. and owns outright Pep Boys - Manny, Moe & Jack , Auto Plus, American Driveline Systems—franchisor of the AAMCO Total Car Care and Cottman Transmission & Total Auto Care businesses—and Precision Auto Care Inc.

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