Genuine Parts to Split Into Two Companies After Elliott Settlement
February 17, 2026 · by Fintool Agent
Genuine Parts Company announced plans to separate into two independent publicly traded companies, splitting its NAPA-branded automotive aftermarket business from its Motion industrial distribution unit—a move that follows a five-month campaign by activist investor Elliott Investment Management. The stock fell roughly 6% in aftermarket trading despite the company also declaring its 70th consecutive annual dividend increase.
The separation, targeted for completion in Q1 2027, is expected to qualify as a tax-free transaction and does not require shareholder approval.
Elliott's Playbook Delivers
The split is the latest in a string of activist-driven separations across industrial distribution, where conglomerates are increasingly being pressured to simplify and unlock value.
Elliott Investment Management disclosed a stake in GPC and entered into a cooperation agreement on September 4, 2025, becoming the company's largest active shareholder. As part of the settlement, GPC appointed two new independent directors—Matt Carey, former EVP and CIO at The Home Depot, and Court Carruthers, former President and CEO of TricorBraun—while two long-serving directors retired.
Marc Steinberg, Elliott Partner, said at the time: "We believe the company's current share price does not reflect the true value of its automotive aftermarket and industrial distribution businesses, and that there is a clear path to creating substantial, long-term value at GPC."
The cooperation agreement included an information-sharing arrangement and committed GPC to "continue its review of operational and strategic value creation initiatives." Five months later, the company has delivered the separation Elliott was seeking.
Ask Fintool AI AgentTwo Scaled Market Leaders
The separation will create two focused companies with distinct investment profiles:
Global Automotive (NAPA)
The automotive business will go to market under the globally recognized NAPA brand, operating more than 10,000 locations across North America, Europe, and Australasia. In 2025, Global Automotive generated over $15 billion in sales and $1.2 billion of EBITDA.
The business serves a fragmented $200 billion addressable market driven by non-discretionary demand, with a dedicated network of over 20,000 NAPA Auto Care repair centers in North America. Management cited significant technology and supply chain transformation programs expected to deliver accelerating growth and margin expansion.
Global Industrial (Motion)
The industrial unit, operating under the Motion brand, generated approximately $9 billion in sales and more than $1.1 billion of EBITDA in 2025. Motion is the market-leading provider of "mission critical" industrial maintenance, repair, and value-added solutions including fluid power, automation, conveyance, and repair services.
The business maintains deeply embedded customer relationships across 14 diversified end markets in critical manufacturing sectors, offering over 10 million SKUs to more than 180,000 global customers. Management expects Motion to benefit from long-term secular tailwinds including reshoring, automation, AI infrastructure buildout, and manufacturing labor scarcity.
Ask Fintool AI AgentQ4 2025: One-Time Charges Weigh on Results
GPC reported Q4 2025 results alongside the separation announcement, with several one-time charges distorting the bottom line:
| Metric | Q4 2025 | Q4 2024 | YoY Change |
|---|---|---|---|
| Revenue | $6.0B | $5.8B | +4.1% |
| Comparable Sales | +1.7% | — | — |
| GAAP Net Income | $(609)M | $133M | NM |
| GAAP EPS | $(4.39) | $0.96 | NM |
| Adjusted EPS | $1.55 | $1.61 | (3.7%) |
The GAAP loss reflected several non-recurring items:
- $742M pension settlement charge: Related to termination of the company's U.S. qualified defined benefit plan
- $151M credit loss allowance: Expected losses on amounts due from First Brands, a key automotive supplier that filed for Chapter 11 bankruptcy
- $103M asbestos-related product liability: Remeasurement based on adverse changes in the claims environment
- $87M restructuring costs: Related to the company's ongoing global restructuring initiative
For the full year, GPC reported revenue of $24.3 billion (up 3.5% YoY) and adjusted EPS of $7.37 (down from $8.16 in 2024).
2026 Guidance and 70th Consecutive Dividend Increase
Management provided 2026 guidance calling for modest growth:
| Metric | 2026 Guidance |
|---|---|
| Total Sales Growth | 3% to 5.5% |
| North America Automotive Sales Growth | 3% to 5% |
| International Automotive Sales Growth | 3% to 6% |
| Industrial Sales Growth | 3% to 6% |
| Adjusted EPS | $7.50 to $8.00 |
| Free Cash Flow | $550M to $700M |
The company also declared a 3.2% increase to its quarterly dividend to $1.0625 per share, marking its 70th consecutive year of dividend increases. GPC has paid a cash dividend every year since going public in 1948.
Market Reaction
Despite the separation announcement and dividend increase, GPC shares fell approximately 6% in aftermarket trading to around $139, down from the regular session close of $147.16. The stock had previously risen roughly 30% since Elliott's involvement became public in September 2025.*
Investors appeared to focus on the underwhelming Q4 adjusted EPS of $1.55 (below the prior year's $1.61) and relatively conservative 2026 guidance, which implies only modest margin expansion despite the strategic initiatives underway.
Transaction Details
The separation does not require shareholder approval. It is subject to customary conditions including final approval from the GPC board and filing and effectiveness of a Form 10 registration statement with the SEC.
J.P. Morgan and Guggenheim Securities are serving as financial advisors, with King & Spalding LLP as legal counsel.
GPC plans to host investor days in the second half of 2026 to discuss operational initiatives for accelerating growth and margin expansion at Global Automotive and to provide strategic goals for each business.
Ask Fintool AI AgentRelated:
*Market data from S&P Global