Federal-Mogul Holdings Corp. announced Wednesday plans to separate its Powertrain and Motorparts divisions into two independent, publicly traded companies serving the global original equipment and aftermarket industries.
“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,” says 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.”
“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,” says 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.”
“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,” says Rainer Jueckstock, co-CEO, Federal-Mogul Holdings Corp. and CEO, Powertrain. “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.”
Completion of the transaction is subject to approval, but the company expects the spin-off to be complete in the first half of 2015.