DuPont exploring sale of performance chemicals unit
9:44 AM MDT | July 23, 2013 | Michael Ravenscroft and Robert Westervelt
DuPont says it is exploring the sale or spin-off of its $7-billion/year performance chemicals unit as part of its transformation to a “higher growth, less cyclical company.” DuPont’s decision to exit performance chemicals segment follows the sale of its automotive coatings business earlier this year and the acquisition of Danisco, in 2011.
"We have been carefully weighing the strong cash generation of our performance chemicals businesses against their cyclicality and lower growth profile, as well as where the power of DuPont's science can be differentiated," says DuPont chair and CEO Ellen Kullman.”We are evaluating options for performance chemicals as part of our ongoing plan to deliver higher growth and greater value creation for our shareholders."
Options being considered include a full or partial separation of each of these businesses through a spin-off, sale, or other transaction, the company says. DuPont’s performance chemicals business includes titanium dioxide (TiO2), fluorochemicals, and specialty and industrial chemicals. Key end markets include plastics and coatings, textiles, mining, pulp and paper, water treatment, and health care.
The performance chemicals unit posted 2012 segment sales of $7.2 billion, roughly 20% of DuPont’s total net sales, and pretax operating income (PTOI) of $1.6 billion, 33% of total DuPont PTOI last year.
DuPont also announced that it would realign its leadership team “to accelerate its integrated science execution.” James Collins will become senior v.p., responsible for the businesses industrial biosciences, performance polymers, and packaging and industrial polymers. DuPont says he will work on integrating DuPont's industrial biosciences into the advanced materials business. Collins has been with DuPont for 29 years and previously led the integration team for the acquisition of Danisco.
Matthew Trerotola will rejoin DuPont as senior v.p. managing the protection technologies, building innovations, and sustainable solutions businesses. He will be responsible for driving improved execution and accelerating growth. Trerotola's previous role was v.p. and group executive/life sciences for Danaher (Washington).