An investment management firm is set to be the new owner of automotive products giant Tenneco.
Tenneco and Apollo Global Management entered into a US$7.1-billion deal Feb. 23. As part of the deal, which is expected to close in the second half of this year, Tenneco will become a private company. It will continue to operate under the Tenneco name.
Dennis Letham, chairman of the board of Tenneco, highlighted the purchase price as a main benefit to company shareholders. Apollo is paying a 100.4 per cent premium of Tenneco’s share price — $20 per share, compared to Tenneco’s closing price of $9.98 on Feb. 22.
“The Board’s decision follows careful evaluation of the transaction and thoughtful and comprehensive review of value creation opportunities for Tenneco,” Letham said in a news release. “We believe this transaction is the right path forward and achieves our goal of maximizing value for Tenneco shareholders, and will benefit our team members, customers and business partners around the world.”
For Brian Kesseler, Tenneco’s chief executive officer, he noted the transaction as a milestone that signals Tenneco’s successful transformation.
“In Apollo, we have a partner that recognizes the strength of our product portfolio and our ability to serve leading OEM and aftermarket blue-chip customers globally,” he added. “Specifically, this partnership will allow us to continue to invest in and grow Tenneco’s multiple segments and global footprint. This transaction is also a testament to the achievements of our global team, whose commitment and focus during these extraordinary times have enabled our success.”