Auto parts maker Tenneco Inc. (NYSE: TEN) on Tuesday agreed to acquire Federal-Mogul from Icahn Enterprises L.P. (NYSE: IEP) in a cash and stock deal valued at $5.4 billion. Under the terms of the deal, Icahn will receive $800 million in cash and 29.5 million shares of Tenneco stock, of which 23.8 million will be convertible nonvoting shares. Tenneco also will assume all of Federal-Mogul’s debt.

Federal-Mogul owns the Champion, Interfil and Goetze brands, among several others. Tenneco makes catalytic converters, diesel particulate filters and shock absorbers. Tenneco’s acquisition is aimed at giving the firm a stronger position in the fast-growing Asian auto parts market.

The sale is expected to close in the second half of this year, subject to regulatory approvals and approval by Tenneco’s shareholders, along with other customary closing conditions. The sale is not subject to any financing conditions.

Tenneco said that it intends to split itself into two publicly traded firms in the second half of 2019 through a tax-free spin-off to existing shareholders.

Tenneco CEO Brian Kesseler said:

This is a landmark day for Tenneco with an acquisition that will transform the company by creating two strong leading global companies, each in an excellent position to capture opportunities unique to their respective markets. Federal-Mogul brings strong brands, products and capabilities that are complementary to Tenneco’s portfolio and in line with our successful growth strategies.

Carl Icahn added:

We expect to be meaningful stockholders of Tenneco going forward and are excited about the prospects for additional value creation. This transaction is an excellent example of our general modus operandi at Icahn Enterprises, by which we seek to acquire undervalued assets, nurture, guide and improve their condition and operations, and ultimately develop them into more valuable businesses, which greatly enhances value for all shareholders.

Icahn acquired his first stake in Federal-Mogul when he purchased $1.1 billion in bonds prior to the company’s 2001 Chapter 11 bankruptcy. In 2007 he converted the bonds to 25.1 million shares and received options on another 50.1 million shares. In 2008 he paid $862.75 million for the options and took control of the company with just over 75% of the outstanding shares. By 2015 his stake had increased to around 82%, and in January of 2017 he acquired the last of the shares he didn’t own.

Tenneco’s shares traded nearly 6% higher to $58.82 early Tuesday. The stock’s 52-week trading range is $50.73 to $65.59. The 12-month consensus price target on the stock was $65.67.

Icahn Enterprises traded up about 1.9% at $60.81 a share, in a 52-week range of $47.06 to $62.79.

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