Federal-Mogul Corporation has entered into a letter of intent to acquire Honeywell’s Bendix friction materials business.
Consummation of the acquisition will be conditional upon Honeywell receiving a bankruptcy court-issued permanent injunction shielding it from all current and future asbestos liabilities related to Honeywell’s worldwide friction materials business.
The completion of the acquisition is subject to Bankruptcy Court approval and customary conditions, including obtaining any government approvals, and will occur after Federal-Mogul emerges from Chapter 11. Federal-Mogul, its US subsidiaries, and certain of its UK subsidiaries voluntarily filed for financial restructuring under Chapter 11 of the US Bankruptcy Code in October 2001.
Under the terms of the transaction, Federal-Mogul would acquire Bendix’s worldwide friction materials business, with the exception of certain US-based assets, subject to certain liabilities.
For up to two years following the closing, Honeywell would continue to manufacture friction materials on a contract basis for Federal-Mogul at some of its US plants.
If the deal is approved, Federal-Mogul would obtain the rights to the Bendix and Jurid brand names for friction products, and Honeywell would retain the right to use the Bendix brand name in its aerospace business.
The Bendix friction materials business is a part of Honeywell’s Transportation and Power Systems group.