Federal-Mogul to Spin Off Aftermarket Business

Federal-Mogul Holdings Corp. plans to split into two independent, publicly traded companies in the first half of 2015.

Chairman Carl Icahn, the investor who controls the company, says the separation will be implemented through a tax-free distribution of shares in Federal-Mogul's aftermarket business to current shareholders of the parent company.

Federal-Mogul began restructuring the underperforming aftermarket operations two years ago after the unit dragged the company into net losses in 2011 and 2012. Now known as Federal-Mogul Motorparts, the division owns such brands as Anco wiper blades, Champion sparkplugs, Ferodo brake pads and Sealed Power engine components.

Spinning off Motorparts from Federal-Mogul's powertrain business will give the former a stronger balance sheet and better access to capital with which to pursue acquisitions, according to Icahn.

This year sales by the aftermarket unit have grown about 1% compared with 8% for powertrain operations.