Federal-Mogul Announces Plan To Separate Into Two Distinct Global Automotive Suppliers

Federal-Mogul Announces Plan To Separate Into Two Distinct Global Automotive Suppliers

The planned separation will be implemented through a tax-free distribution of Federal-Mogul's Motorparts division to shareholders of Federal-Mogul Holdings Corp.

SOUTHFIELD, Mich. – Federal-Mogul Holdings Corp. announced its plan 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 Corp.
"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 Corp. "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."
Federal-Mogul Motorparts sells and distributes a broad portfolio of products through more than 20 of the world’s most recognizable brands in the global vehicle aftermarket, while also serving original equipment manufacturers with braking, chassis and wiper products. Motorparts’ aftermarket brands include ANCO wiper blades; Champion spark plugs, wipers and filters; AE, Fel-Pro, FP Diesel, Goetze, Glyco, Nüral, Payen and Sealed Power engine products; MOOG steering and suspension parts; and Ferodo, Jurid and Wagner brake products.
"Since creating the Motorparts division in 2012, we have made solid progress in developing and implementing a strategic plan to take advantage of the growing and increasingly complex global car parc," said Daniel Ninivaggi, co-CEO, Federal-Mogul Holdings Corp. and CEO, Motorparts. "The structure of the separation will provide Federal-Mogul Motorparts with enhanced financial and operating flexibility to pursue growth and consolidation opportunities, while preserving our access to the world-class technology and product expertise that resides within Federal-Mogul’s Powertrain division."
Federal-Mogul Powertrain is a global supplier of powertrain components to original equipment manufacturers, designing and manufacturing products and services that enable improved fuel economy, reduced emissions and enhanced vehicle performance, according to the company.
"The Powertrain division, focused on providing our customers with the technologies they need to meet today’s and tomorrow’s challenges, will continue to grow organically based upon our superior offerings. We will also pursue market opportunities to expand our scope, size and footprint, focusing on core components for combustion engines that offer a strong strategic fit with our existing portfolio," said Rainer Jueckstock, co-CEO, Federal-Mogul Holdings Corp. and CEO, Powertrain.
Completion of the transaction is subject to customary conditions, including among others, Federal-Mogul’s receipt of an IRS ruling or opinion of counsel to the effect that the distribution will qualify as a transaction that is generally tax-free for U.S. Federal Income tax purposes; as well as effectiveness of a Form 10 Registration Statement filed with the SEC. No assurances can be given regarding the ultimate timing of the separation or that it will be consummated, however the company says its objective is to complete the spin-off of Federal-Mogul Motorparts in the first half of 2015.

You May Also Like

MAHLE Selects Second Winner of Engine Giveaway

The lucky winner has been awarded a vintage Chevrolet small-block engine built by Baldwin Racing Engines of Friedheim, Missouri.

MAHLE Aftermarket announced the winner of the second segment of the “Powered by MAHLE” Engine Giveaway.

The lucky winner, who is based in Missouri, has been awarded a vintage Chevrolet small-block engine (1967-2002) built by Baldwin Racing Engines of Friedheim, Missouri. The engine features all applicable premium MAHLE components. 

Raybestos Announces 2023 Racing Sponsorships

Raybestos will sponsor Sally McNulty and Team Infamous (driver Derek Madison) for the 2023 race season.

ASE Congratulates Inaugural President’s Club Honorees

The inaugural class will feature six of the most accomplished automotive service professionals in the industry.

Arnold Motor Celebrates Fundraising, Key Channel Partners

The company recognized PPG Industries as Vendor of the Year, and celebrated its fundraising for Tori’s Angels.

UAF Awards Scholarships for 2023-2024 Academic Year

Those awarded with scholarships will be attending a two-year or four-year college or university or an accredited automotive vocational program.

Other Posts

Lateiner: Diversity, Inclusion Needed to Stem Tech Shortage

The auto-industry influencer spoke at the ASE Education Foundation Instructor Training Conference.

UAF Welcomes GB Remanufacturing as Lifetime Trustee

Michael Kitching, president and CEO of GB Remanufacturing, will serve as the company’s representative on the UAF board of trustees.

Auto Value/Bumper to Bumper Announce Scholarship Winners

The recipients were selected from a competitive pool of student applicants from across North America.

Advance Shakes Up Executive Team, Launches Strategic Review

Former Home Depot exec Shane O’Kelly will take over as president and CEO effective Sept. 11.