DuPont is latest industrial behemoth to split into multiple public companies

By Claudia Assis

New Dupont, Electronics, Water are coming to stock screens

DuPont de Nemours Inc. said late Wednesday it will separate itself into three standalone, publicly traded companies within the coming months, one keeping the focus on industrial materials while the other two venture into the electronics and water-filtration businesses.

Separately, the company said that its board selected Lori D. Koch, DuPont's chief financial officer, to be its new chief executive, succeeding Edward D. Breen. Dupont (DD) shares rose more than 5% in after-hours trading following the news.

Effective June 1, Breen will transition to full-time executive board chair, the company said.

DuPont de Nemours will split into New DuPont, a diversified industrial company that will include trademarked brands such as house-wrapping material Tyvek and Kevlar, used in bulletproof vests and several other applications.

New DuPont will also offer products for healthcare companies and carmakers, DuPont said.

"New DuPont will have a strong presence in fast-growing healthcare end-markets including applications for biopharma consumables, medical devices and medical packaging. The company will also be a leading provider of key technologies enabling advanced mobility, particularly within electric vehicles," DuPont said.

A second business entity, Electronics, will offer electronics materials, including those used in chip making, the company said.

"The company will be well-positioned to capture growth in the semiconductor industry, driven by high-performance computing demands from AI, high-speed connectivity, smart and autonomous vehicles and the Internet of Things, among other mega-trend growth drivers," DuPont said.

The third company, Water, would offer "comprehensive" water-related products and services, including filtration and purification technologies, DuPont said.

DuPont said it expects to execute the proposed separations in a way that will be tax-free for DuPont shareholders for U.S. federal income-tax purposes.

The separations are expected to be completed within 18 to 24 months, and a shareholder vote won't be required, DuPont said.

All three companies "will have strong balance sheets and will be capitalized to provide the financial flexibility to take advantage of future growth opportunities. New DuPont is expected to maintain its investment-grade credit rating," DuPont said.

In addition to naming Koch its next CEO, DuPont also named Antonella Franzen, current CFO of DuPont's Water & Protection segment, its new CFO.

DuPont emerged in 2017 following a merger of equals between the Dow Chemical Co. and E.I. du Pont de Nemours & Co., completed in August of that year but announced a couple of years earlier.

The emerging company was named DowDuPont, but after spinning off its agricultural businesses, creating Corteva Inc. (CTVA), it shed the Dow part of its name.

Recent major industrial splits included General Electric splitting itself into GE Vernova Inc. (GEV) and GE Aerospace (GE); and Johnson & Johnson (JNJ) spinning off its consumer-health division into Kenvue Inc. (KVUE), with brands such as Aveeno and Band-Aid under its belt.

See also: GE Vernova debuts on NYSE, as spinoff from GE's aerospace-only unit completes

Also: Kenvue stock cheered in Wall Street debut, as Tylenol and Band-Aid brand parent is valued at $48 billion

-Claudia Assis

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05-22-24 1755ET

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