Tenneco Strikes Deal With El Paso Energy

El Paso Energy Corp. said Wednesday it will acquire Tenneco Inc.’s energy division in a $4 billion deal that will effectively put Tenneco out of the energy business.

The move is part of an ongoing reorganization at Tenneco intended to emphasize the company’s auto parts and packaging business. It marks the third time in the past 15 months that the Greenwich, Conn.-based company has sold or spun off a major division.

Under the deal, Tenneco shareholders will receive new shares of El Paso Energy valued at $750 million.

In addition, El Paso Energy, formerly El Paso Natural Gas Co., will assume $2.65 billion of Tenneco’s existing debt and preferred stock and approximately $600 million of Tenneco Inc.’s liabilities and considerations.