Sept. 03--Southfield-based auto parts supplier Federal-Mogul said today it will split into two publicly traded companies -- one to make and sell parts for the auto aftermarket industry and one to make powertrain and engine parts.
The company, controlled by Carl Icahn, said it hopes to complete the transaction in the first half of 2015.
Shares of Federal-Mogul rose 43 cents, or 2.5%, on Wednesday to $17.69 in morning trading. That's still down substantially from 52-week high of $22.97 on Jan. 8.
"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," Icahn said in a statement today.
According to Icahn, who owns about 80% of the company's stock, Federal-Mogul Motorparts will have a strong balance sheet and access to large amounts of capital that will allow it to grow through acquisitions.
Federal-Mogul motorparts sells popular aftermarket brands and products such as ANCO wiper blades and Champion spark plugs.
The remaining powertrain business, he said, will benefit from a clearer focus.
"Upon separation both businesses will be well-capitalized and poised for stand-alone success," Icahn said.
Federal-Mogul powertrain will design and make components for automakers that improve fuel economy, reduce emissions and enhance vehicle performance.
The company has been operating as a holding compnay with two separate divisions since 2012 and renamed its vehicle components divison Federal-Mogul Motorsports in April.
The company, which emerged from bankruptcy in December 2007, has annual sales of about $6.8 billion.
Contact Brent Snavely: 313-222-6512 or email@example.com. Follow him on Twitter @BrentSnavely.
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