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NEWS RELEASE EXHIBIT 99.1
{TENNECO LOGO}
TENNECO BOARD APPROVES SEPARATION OF TENNECO COMPANIES
AND DIVIDEND OF TENNECO PACKAGING SHARES
TO SHAREOWNERS IN TAX-FREE SPIN-OFF
GREENWICH, Conn., -- October 12, 1999 -- Tenneco Inc. (NYSE: TEN) today
said that its Board of Directors has approved the separation of Tenneco
Automotive and Tenneco Packaging, effective upon the tax-free spin-off of
Tenneco Packaging to shareowners of Tenneco common stock. The spin-off is
expected to occur Thursday, Nov. 4. Tenneco Automotive and Tenneco Packaging
also are expected to begin regular trading on the New York Stock Exchange as
stand-alone public companies Nov. 5.
The company said its board approved accomplishing the separation of Tenneco
Packaging through the payment of a dividend payable Nov. 4 in the form of
Tenneco Packaging shares - one share in Packaging for each share of Tenneco
- -- to Tenneco shareowners of record at the close of business Oct. 29. In
August, Tenneco received a ruling from the Internal Revenue Service (IRS)
that the dividend would be tax-free to shareowners and the company. The company
said that as a result of the spin-off there would not be a fourth quarter cash
dividend. Dividend policy for the two new stand-alone public companies going
forward, including the fourth quarter, will be determined independently by their
boards.
The separation of Tenneco Automotive and Tenneco Packaging into two
publicly owned stand-alone companies, with 1998 revenues of $3.2 billion and
$2.8 billion, respectively, culminates the nearly decade-long transformation of
Tenneco from a conglomerate to two focused manufacturing companies. "The split
will enable each company to concentrate on its core business, permit investors
to make more focused investment decisions, and enhance the potential of each
company to achieve more appropriate market valuation," said Tenneco Chairman and
Chief Executive Officer Dana Mead.
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Today's announcement follows the April 1999 board decision to pursue a
tax-free spin-off of Tenneco Packaging. Tenneco also announced it would propose
to shareowners a reverse stock split of Tenneco Automotive effective when it
becomes independent.
Since 1992, Tenneco has streamlined itself from eight business units
into two, and redeployed more than $15 billion. Proceeds were used to pay down
$8 billion in debt; deliver $1.5 billion in subsidiary share dividends to
shareowners; repurchase more than $1 billion in stock; make $1.5 billion in
capital investments and invest $3 billion in acquisitions to build Tenneco
Automotive and Tenneco Packaging. In addition, the company has paid more than
$1.8 billion in cash dividends since 1992.
Major acquisitions to build the new Tenneco Packaging included Mobil
Plastics, with its Hefty(R) brand, Amoco Foam,and KNP BT Protective and Flexible
Packaging; and to build Tenneco Automotive, Gillet(TM) and Clevite(TM).
Tenneco's transformation included a number of major accomplishments.
After Tenneco sold its minerals business in 1991 for $700 million, Mead led the
restructuring and stabilization of J.I. Case with the help of a billion dollar
equity offering and then its sale in public offerings for more than $4 billion
in 1994-95. In 1995, Tenneco sold Albright and Wilson Chemicals in an IPO on the
London market, realizing $820 million in proceeds. In 1996, Newport News was
spun out to shareowners with an initial market value of $1.2 billion, and
Tenneco Energy was merged with El Paso Energy in a $4 billion transaction.
In April 1999, Tenneco received approximately $2 billion in debt assumption and
cash and $200 million in equity from the sale of 55 percent of its
containerboard business.
In September, Tenneco announced its intention to sell its remaining
stake in the containerboard business through an initial public offering, with
the proceeds to be used to reduce debt. The registration statement has been
filed for the containerboard offering, which is currently in the marketing
period. Also, as part of the debt realignment for the
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spin-off, Tenneco has offered and priced $500,000,000 of Tenneco Automotive
high yield notes, which is scheduled to settle on Oct. 14, 1999, has reached
bank agreements totaling $2.5 billion to facilitate the separation of the
Tenneco Automotive and Tenneco Packaging, and announced cash tender and
exchange offers for $2.46 billion.
The shareowner meeting to consider the proposed one-for-five reverse
stock split of Tenneco Automotive and declassification of its board of directors
will be held on Oct. 25, although neither of the proposals is required to pass
in order for the spin-off and separation to proceed.
Mr. Mead will be non-executive chairman of both companies until the end
of the first quarter, 2000. Mark P. Frissora will become chief executive officer
of Tenneco Automotive, and Richard L. Wambold will become chief executive
officer of Tenneco Packaging, when the companies separate.
Tenneco is a $6 billion manufacturing company headquartered in
Greenwich, Conn., with 38,000 employees worldwide. Tenneco Automotive is one of
the world's largest producers and marketers of ride control and exhaust systems
and products, which are sold under the Monroe(R) and Walker(R) global brand
names. Among its products are Sensa-Trac(R) shocks and struts, Rancho(R) shock
absorbers, Walker(R) Quiet-Flow(TM) mufflers and DynoMax(TM) performance exhaust
products, and Monroe(R) Clevite(TM) vibration control components. Tenneco
Packaging is among the world's leading and most diversified packaging companies.
Among its products are Hefty(R) trash bags, Hefty OneZip(R) and Baggies(R) food
storage bags, E-Z Foil(R) single-use aluminum cookware and Hexacomb(R) paper
honeycomb products.
Several statements in this press release are forward looking and are identified
by the use of forward looking words and phrases, such as "effective upon," "is
scheduled," "expected," "accomplishing," "would be," "as a result," "will be
determined," "will enable," "permit," "potential," "to achieve," "to pursue,"
"would propose," "when," "would," "to be used," "to facilitate," "to consider,"
"will be held," "proposed," "proposals," "is required," "proceed," "will be,"
"will settle," and "will become." These forward looking statements are based
on the current expectations of the Company (including its subsidiaries).
Because forward looking statements involve risks and uncertainties, the
Company's plans, actions and actual results could differ materially. Among the
factors that could cause plans, actions and results to differ materially from
current expectations are: (i) the general political, economic and competitive
conditions in markets and countries where the Company and its subsidiaries
operate, including currency fluctuations and other risks associated with
operating in foreign countries; (ii) governmental actions, including the ability
to receive regulatory approvals and the timing of such approvals; (iii) change
in capital availability or costs; (iv) results of analysis regarding plans and
strategic alternatives; (v) changes in consumer demand and prices, including
decreases in demand for the Company's products and the resulting negative impact
on its revenues and margins from such products; (vi) the cost of compliance with
changes in regulations, including environmental regulations; (vii) workforce
factors such as strikes or labor interruptions; (viii)
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material substitutions and increases in the costs of raw materials; (ix) the
ability of the Company and its subsidiaries to integrate operations of acquired
businesses quickly and in a cost-effective manner; (x) new technologies; (xi)
the ability of the Company, its subsidiaries and those with whom they conduct
business to timely resolve the Year 2000 issue (relating to potential equipment
and computer failures by or at the change of the century), unanticipated costs
of, problems with, or delays in resolving the Year 2000 issue, and the costs and
impacts if the Year 2000 issue is not timely resolved; (xii) changes by the
Financing Accounting Standards Board or other accounting regulatory bodies of
authoritative generally accepted accounting principles or policies; and (xiii)
the timing and occurrence (or non-occurrence) of transactions and events which
may be subject to circumstances beyond the control of the Company and its
subsidiaries.
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Media Contact: Neil Geary (203) 863-1073
Investor Relations Contact: Stan March (203) 863-1117