DETROIT—When Federal-Mogul Holdings Corp. this month scrapped its plan to split in two, it raised eyebrows because it came right after its largest shareholder agreed to acquire the auto parts chain Pep Boys-Manny Moe & Jack.
So far, any connection between the two moves remains theoretical.
But the timing has raised more questions than answers about the future of the longtime auto supplier of engine parts and well-known aftermarket brands such as Champion spark plugs, Anco wiper blades and Moog steering parts.
Federal-Mogul pointed to market conditions as the culprit behind its decision not to split its aftermarket parts division from its powertrain division.
Billionaire Wall Street investor Carl Icahn, an 82 percent stakeholder in Federal-Mogul, won a $1.03 billion bidding war for Pep Boys, and experts believe he'll use the parts retailer as a mainline for Federal-Mogul parts but fear his vertical integration strategy will hurt the company over the long term.
Pep Boys' 800 stores, paired with Icahn's other aftermarket retailer, the 278-location Auto Plus, would make up the fifth-largest retail auto parts chain in the U.S. Even with Pep Boys' stores, Auto Plus would be significantly smaller than rivals Advance Auto Parts Inc., Autozone Inc. and O'Reilly Automotive Inc.
The decision to call off the split and Icahn's Pep Boys acquisition comes in the midst of global financial headwinds faced by Federal-Mogul.