BAD CAMBERG, Germany (Jan. 8, 2014) — Federal-Mogul Corp.'s European subsidiaries have agreed with Honeywell International Inc. to acquire Honeywell's Friction Materials business unit for approximately $155 million.
As part of the deal, Federal-Mogul will gain certain assets of Honeywell's automotive and industrial brake business, including plants in China and Romania, Federal-Mogul said. The Romanian plant, located in Ploiesti, came online in November 2012 and was the company's first plant in Europe dedicated to the exclusive use of its Hot Press manufacturing technology.
The transaction, which is subject to required regulatory approvals and applicable information and consultation requirements, is expected to close in the second half of this year, according to both parties.
Honeywell said the transaction is expected to generate an after-tax loss of about 4 cents per share, which will be recognized in the fourth quarter of 2013 results. The loss shouldn't affect Honeywell's fourth quarter 2013 of full-year 2014 financial outlook, it said.
"Smart investment decisions over the past few years have significantly improved the competitive position of Friction Materials faster than we originally planned," said Honeywell Chairman and CEO Dave Cote. "While the business is much stronger today, it does not fit with Honeywell's core differentiated technologies focus and long-term growth plans."
Kevin Freeland, CEO, Federal-Mogul Vehicle Components, called the acquisition a "solid addition to our existing global friction business."
"We expect to combine the Federal-Mogul and Honeywell brake businesses to realize significant synergies in all elements of the business," he said. "Our customers in all segments and regional will benefit from the transaction as we will be able to provide them with the best of both companies."
Federal-Mogul said the addition of the Honeywell business will "substantially strengthen the manufacturing and engineering technology footprint" of its brake platform with improved manufacturing capacity and capability.
Honeywell tried in 2003 to sell its Bendix friction material business to Federal-Mogul, but Honeywell halted discussions after the two entities were unable to agree on terms of a deal.