Billionaire Investor Carl Icahn's Icahn Enterprises is to sell Federal-Mogul to Tenneco for US$5.4bn.  

Tenneco said it plans to split the company into two businesses which will be spun off as separate entities. Federal-Mogul operates an OE powertrain components division and also, separately, sells some products in the aftermarket.

There will be an aftermarket and ride performance company which will include Tenneco Ride Performance and Federal-Mogul Motorparts. A powertrain technology company will include Tenneco Clean Air and Federal-Mogul Powertrain.  

Tenneco said the powertrain technology company will be one of the largest pure play powertrain suppliers globally with a portfolio of engine-to-tailpipe products and system solutions.

The acquisition is expected to close in the second half of 2018, subject to regulatory and shareholder approvals and other customary closing conditions, with the separation occurring in the second half of 2019.

"This is a landmark day for Tenneco with an acquisition that will transform the company by creating two strong leading global companies, each in an excellent position to capture opportunities unique to their respective markets," said Brian Kesseler, CEO, Tenneco. "Federal-Mogul brings strong brands, products and capabilities that are complementary to Tenneco's portfolio and in line with our successful growth strategies.  Unleashing two new product focused companies with even stronger portfolios will allow them to move faster in executing on their specific growth priorities."

Carl Icahn, Chairman of Icahn Enterprises, stated: "Icahn Enterprises acquired majority control of Federal-Mogul in 2008 when we saw an out-of-favor market opportunity for a great company. During that time, we have built one of the leading global suppliers of automotive products. I am very proud of the business we have built at Federal-Mogul and agree with Tenneco regarding the tremendous value in the business combination and separation into two companies. We expect to be meaningful stockholders of Tenneco going forward and are excited about the prospects for additional value creation."