Tenneco to Sell Container Board Stake

Tenneco Inc., a former conglomerate that now makes auto parts and plastic bags, said it has agreed to sell most of its container-board business, as it reported a 95% drop in earnings for the latest quarter. The deal, a key part of the company’s restructuring, calls for Tenneco to receive $2 billion in cash from investment firm Madison Dearborn Partners Inc. and retain a 45% stake in the unit. Greenwich, Conn.-based Tenneco said profit before charges plunged to $4 million, or 2 cents a share, in the fourth quarter, mainly because of weakness in its auto parts division. Analysts were expecting earnings of 8 cents. Tenneco said it will use the cash proceeds of the container-board business sale to reduce debt as it considers strategic alternatives for its auto parts and specialty packaging businesses. The transaction, expected to be completed in the second quarter, will create a new stand-alone entity called Packaging Corp. of America. The company will be based in Lake Forest, Ill., with annual revenue of about $1.5 billion and 7,500 employees.