The sale wraps a tumultuous stretch for Tenneco, which has endured activist investor pressure, board shakeups and an 85 percent drop in the stock price over the past five years. More recently, semiconductor shortages caused by the pandemic have wreaked havoc on the automotive industry.
The supplier of mufflers and other car parts will continue to operate under the Tenneco brand following the deal, the companies said.
“This partnership will allow us to continue to invest in and grow Tenneco’s multiple segments and global footprint,” Tenneco CEO Brian Kesseler said in the statement.
The deal was unanimously approved by Tenneco’s board.
The Apollo deal marks the latest twist in Tenneco’s saga. The company agreed in 2018 to acquire longtime auto supplier Federal-Mogul, a rival parts manufacturer backed by activist Carl Icahn, for $5.4 billion with the intention of subsequently breaking the company apart. That plan was upended by deep strains in Tenneco’s business, leading to the resignation of co-CEO Roger Wood in early 2020.
Around the same time, Dan Ninivaggi, a former Icahn Automotive Group executive, called for sweeping board changes, cash-raising steps and a possible sale of the company. In a January 2020 letter to the board, he said Tenneco “has never created a penny of shareholder value.” The stock has been on a steady slide from the mid-$60s in 2017 and early 2018.
Separately, Tenneco said its fourth-quarter net income plunged to a loss of $35 million from a gain of $167 million during the same quarter last year. Revenue slid 6 percent to $4.4 billion.
Tenneco ranks No. 15 on the Automotive News list of the top 100 global suppliers with estimated worldwide sales to automakers of $12.6 billion in 2020.