Billionaire Carl Icahn's investment company offered to buy the 18 percent of auto parts maker Federal-Mogul that it does not already own for about $213 million.
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Icahn Enterprises has been focusing on its auto business, its second largest by revenue, as a slump in crude prices slows growth in its energy business, which accounted for nearly half of its revenue in 2014.
The company said in December it would buy auto parts retailer Pep Boys-Manny Moe & Jack for about $1 billion.
Icahn Enterprises, which owns about 82 percent of Federal-Mogul, said it would pay $7 per share in cash, representing a premium of about 41 percent to the stock's Friday closing.
The offer values the company at about $1.2 billion, based on the company's shares outstanding as on Sept. 30.
Federal-Mogul said its board would appoint a special committee to review the offer.
(Reporting by Ankit Ajmera in Bengaluru; Editing by Saumyadeb Chakrabarty and Savio D'Souza)