Illinois-based global manufacturing company Tenneco has hired Khaitan & Co to conduct due diligence on the Indian subsidiaries of Federal-Mogul prior to its purchase of the company.
“Since the deal involved legal due diligence of several subsidiaries of Federal-Mogul in India which had multiple real estate properties across various states, advising on local state issues for the acquisition and spin-off after the closing of the deal was a unique feature,” Khaitan & Co partner Rabindra Jhunjhunwala told India Business Law Journal.
The firm also advised on trade union and other labour law issues relating to the Indian subsidiaries, completing the diligence process within three weeks.
Tenneco designs, manufactures and distributes Ride Performance and Clean Air products and technology solutions while Federal-Mogul is a global supplier to original equipment manufacturers and the aftermarket.
The US$5.4 billion deal will see Tenneco acquire the Federal-Mogul group through a combination of US$800 million in cash, 5.7 million shares of Tenneco class A common stock, 23.8 million shares of non-voting class B common stock and assumption of debt. Under the agreement, Tenneco can reduce the number of shares of class B non-voting common stock by up to 7.3 million shares and increase the cash consideration proportionately at the closing.
The acquisition is expected to close in the second half of 2018 and is subject to regulatory and shareholder approvals. Tenneco will create two independent public companies as part of the deal – Aftermarket & Ride Performance Company, and Powertrain Technology Company – by the second half of 2019.
In addition to Jhunjhunwala, Khaitan & Co’s corporate team comprised principal associate Shweta Dwivedi, and associates Kevin Shah, Kanika Mathew, Balaji Venkatakrishnan and Shreya Vajpei. Partner Anshul Prakash and associate Abhimanyu Pal advised on employment law aspects and associate partner Yigal Gabriel advised on real estate issues. Kirkland & Ellis and Mayer Brown are Tenneco’s international legal advisers.