LAKE FOREST, Ill. — Tenneco Inc. (NYSE: TEN) has reconfirmed it has been reviewing strategic alternatives to maximize shareholder value and in consultation with its advisors, is reviewing and considering, in addition to the current plan to spin off the company’s Aftermarket and Ride Performance business (DRiV), a full range of strategic options including the sale of DRiV and/or the Company’s Powertrain Technology business (New Tenneco). Transactions involving other individual product lines in the portfolio are also under consideration.
The company also announced that it is committed to adding at least one new independent director over the course of 2020 as part of its ongoing Board refreshment process. This follows the recent addition of two new independent directors.
Gregg M. Sherrill, Chairman of the Tenneco Board, said, “The addition of Lazard to our existing advisor team will add a fresh perspective in our assessment of strategic alternatives. Further, the Board is committed to best practices in corporate governance, and we will continue to refresh its membership with individuals who have the skill sets to help us achieve our strategic and operational objectives.”
As announced on January 7, 2020, the company is implementing a plan to accelerate the reduction of operational costs, improve cash flow performance, reduce leverage, and better position DRiV and New Tenneco for the planned separation. Tenneco has made significant progress to facilitate the planned spin-off of DRiV and has substantially completed all necessary system and process components required for New Tenneco and DRiV to operate independently.
Headquartered in Lake Forest, Ill., Tenneco is one of the world’s leading designers, manufacturers and marketers of Aftermarket, Ride Performance, Clean Air and Powertrain products and technology solutions for diversified markets, including light vehicle, commercial truck, off-highway, industrial and the aftermarket, with 2018 pro-forma revenue of $17.8 billion and approximately 81,000 employees worldwide. On October 1, 2018, Tenneco completed the acquisition of Federal-Mogul, a leading global supplier to original equipment manufacturers and the aftermarket. Additionally, the company expects to separate its businesses to form two independent companies, an Aftermarket and Ride Performance company as well as a Powertrain Technology company.
Following the expected separation of Tenneco to form two independent companies, an Aftermarket and Ride Performance company (DRiV™) as well as a new Powertrain Technology company, DRiV will be one of the largest global multi-line, multi-brand aftermarket companies, and one of the largest global OE ride performance and braking companies. DRiV’s principal product brands will feature Monroe®, Ӧhlins®, Walker®, Clevite® Elastomers, MOOG®, Fel-Pro®, Wagner®, Ferodo®, Champion® and others. DRiV would have 2018 pro-forma revenues of $6.4 billion, with 54% of those revenues from aftermarket and 46% from original equipment customers.
The entire announcement can be read by clicking on this sentence.