DuPont reported May 22 that it will separate into three distinct, publicly traded companies. It plans to divide its electronics and water businesses to its shareholders in a tax-free manner, so they can focus and be more agile in their industries, while the remaining DuPont organization will continue as a diversified, industrial company. It expects to complete these separations in 18 to 24 months.
As standalone companies, each of the new companies is expected to benefit from:
- Tailoring capital allocation strategies to pursue differential, strategic growth objectives,
- Enhanced, strategic flexibility to pursue portfolio enhancing mergers and acquisitions (M&A),
- Investment profiles appealing to different investors, and
- Distinct boards of directors and management teams with leaders experienced in creating value in each industry.
While the separation transactions won’t require a shareholder vote, they must satisfy customary conditions, including final board approval, tax opinion from counsel, filing and effectiveness of Form 10 registration statements with the U.S. Securities and Exchange Commission, applicable regulatory approvals and satisfactory completion of financing.
"This is an extraordinary opportunity to deliver long-term, sustainable shareholder value by creating three strong, industry-leading companies," says Ed Breen, DuPont executive chairman and CEO. "The three-way separation will unlock incremental value for shareholders and customers and also create new opportunities for employees. Critically, each company will have greater flexibility to pursue their own focused growth strategies, including portfolio enhancing M&A."
Also on May 22, DuPont added that present CFO Lori Koch will become CEO on June 1, succeeding Breen, who will continue as executive chairman. Antonella Franzen, presently CFO of the Water & Protection division, will become CFO of DuPont. Once the separations are complete, Koch and Franzen will remain in their respective positions at the new DuPont.
Overview of the three new firms
The new DuPont will be powered by materials-science and application-engineering expertise, innovation, manufacturing capabilities, and brands such as Tyvek, Kevlar and Nomex. It will also have a strong presence in healthcare end-markets, including applications for biopharma consumables, medical devices and medical packaging, and electric vehicles (EV). Finally, the company will still serve the safety, construction, aerospace and other industrial markets. The new DuPont will include existing divisions in the Water & Protection division, excluding Water Solutions, as well as most Industrial Solutions businesses including healthcare, and retained Corporate divisions including adhesives. These businesses generated net sales of approximately $6.6 billion in 2023.
Electronics will produce consumables used in semiconductor chip manufacturing, and electronic materials for signal integrity, power management and thermal management. It will include the existing Semiconductor Technologies and Interconnect Solutions business lines, as well as electronics-related product lines from Industrial Solutions. These businesses generated net sales of approximately $4.0 billion in 2023.
Water has a portfolio of water filtration and purification solutions with technologies in reverse osmosis, ion exchange and ultrafiltration. It provides components and systems that generate clean and fit-for-purpose water for users in industrial water and energy, life sciences and specialties, municipal and desalination, and residential and commercial markets. Water will include DuPont's present Water Solutions business line that generated net sales of approximately $1.5 billion in 2023.
