Federal-Mogul Holdings Corporation plans to separate its Powertrain and Motorparts divisions, spinning off the Motorparts division to shareholders, resulting in two independent, publicly-traded companies. The decision was announced almost two years to the day after Federal-Mogul reorganized as two separately managed organizations, one producing powertrain components and one supplying aftermarket brake, suspension, steering, and other parts.
"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,” explained chairman Carl Icahn.
Federal-Mogul Powertrain designs and manufactures powertrain components it supplies to original equipment manufacturers, including pistons, piston rings, cylinder liners, valve seats, valve guides, bearings, spark plugs, and more. This organization includes over 70 plants and 12 engineering centers around the world -- include metalcasting plants in North America, Europe, and China, producing cast aluminum pistons and specialty steel piston rings, among other parts.
Federal-Mogul Motorparts sells and distributes more than 20 brands of automotive aftermarket wiper blades, spark plugs, wipers and filters; engine products; steering and suspension parts; and brake products.
The company said its objective is to complete the spin-off of Federal-Mogul Motorparts in the first half of 2015.
The chairman noted that both new businesses would be well capitalized after the split. He claimed the new Federal-Mogul Motorparts business will have a strong balance sheet and access to capital, which will allow it to pursue acquisitions in the automotive aftermarket segment.