ACQUISITIONS

Filters Business Acquisition

On May 26, 2016, the Company completed the acquisition of the assets of a filter manufacturing business in Mexico, which primarily serves the Mexican market, for a purchase price of $25 million, net of cash acquired. The estimated fair value of assets acquired and liabilities assumed at the acquisition date is approximately $25 million. The Company is in the process of finalizing certain customary post-closing adjustments which could affect the estimated fair value of assets acquired and liabilities assumed.

TRW Engine Components Acquisition

Pursuant to the Amended and Restated Share and Asset Purchase Agreement dated January 23, 2015, the Company completed the acquisition of TRW’s valvetrain business and closed the transaction on February 6, 2015. The business was acquired through a combination of asset and stock purchases for a purchase price of approximately $309 million. On July 7, 2015, the Company completed the purchase of certain additional business assets of the TRW's valvetrain business. The business was acquired through stock purchases for a base purchase price of approximately $56 million. The purchase includes a $25 million noncontrolling interest related to a 66% stake in a majority owned entity the Company consolidates into its financial statements. The acquisition was funded primarily from the Company's available revolving line of credit and is subject to certain customary closing and post-closing adjustments. The acquisition of TRW’s valvetrain business adds a completely new product line to the Company's portfolio, strengthens the Company's position as a leading developer and supplier of core components for engines, and enhances the Company's ability to support its customers to improve fuel economy and reduce emissions.

The following table summarizes the fair value of the assets acquired and liabilities assumed at the acquisition date:



	Fair Value
Cash	$	14
Accounts receivable, net	31
Inventory, net	36
Property, plant and equipment, net	234
Goodwill	74
Other identified intangible assets	107
Accounts payable	(22		)
Accrued liabilities	(39		)
Acquired postemployment benefits	(46		)
Other net assets	1
Total identifiable net assets	$	390

In addition to the benefits noted above, goodwill is created from the expected synergies through the integration of the engine components business into the existing Powertrain segment which will allow for improved profitability.

Proforma Results

The following proforma results for the three and six months ended June 30, 2016 and 2015 assume the purchase of the TRW valvetrain business occurred as of the beginning of 2015 and are inclusive of provisional purchase price adjustments. The proforma results are not necessarily indicative of the results that actually would have been obtained.



	Three Months Ended				Six Months Ended
	June 30				June 30
	2016		2015		2016		2015
Net sales	$	1,924	$	1,962	$	3,821	$	3,841

Net income (loss) attributable to Federal-Mogul	$	31	$	22	$	66	$	11

Earnings (loss) per share attributable to Federal-Mogul - basic and diluted	$	0.18	$	0.13	$	0.39	$	0.07

As the assets of the filter business in Mexico were acquired on May 26, 2016, the proforma effects on the Company's results are not significant for the three and six months ended June 30, 2016.

During the six months ended June 30, 2015 the Company recorded $1 million in transaction related expenses, primarily legal and other professional fees, associated with the acquisition of certain assets of the TRW engine components business. These expenses were recorded in "Selling, general and administrative expenses" within the condensed consolidated statements of operations.