Southfield-based auto supplier Federal-Mogul Holdings Corp. said Wednesday it will separate its Powertrain and Motorparts divisions into two separate, publicly traded companies.
The company said it will separate the companies by spinning off its Motorparts division to shareholders. Federal-Mogul hopes to complete the move by the first half of 2015.
“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,” Carl Icahn, chairman of the board of Federal-Mogul Corporation, said in a statement. “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’s Motorparts division sells products including ANCO wiper blades, Champion spark plugs, wipers and filters and Wagner brake products, among others.
“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,” Daniel Ninivaggi, Co-CEO, Federal-Mogul Holdings Corp. and CEO, Motorparts, said in a statement. “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’s Powertrain division supplies components to auto companies that help improve fuel economy, reduce emissions and enhance vehicle performance, it said in a statement.
The company was founded in Detroit in 1899 and employs more than 45,000 people in 34 countries, according to its website.