DuPont Announces Strategic Split into Three Independent Companies, Appoints New CEO

Key Points

• DuPont plans to split into three independent
• publicly traded companies focusing on Electronics
• Water
• and a diversified industrial segment.
• Lori Koch will succeed Edward Breen as DuPont's CEO from June 1
• 2024
• with Antonella Franzen appointed as the new CFO.
• The restructuring is expected to be tax-free for DuPont shareholders and aims to sustain high margins and robust cash flow
• with separations anticipated to be completed within 18 to 24 months.

In this news

DuPont has unveiled a strategic plan to split into three independent, publicly traded companies, focusing on Electronics, Water, and a diversified industrial segment. This move is designed to enhance shareholder value by allowing each entity to concentrate on its specific market. The restructuring will see New DuPont emerge as a diversified industrial leader, while the Electronics and Water businesses will operate independently. The split is expected to be tax-free for DuPont shareholders and aims to sustain high margins and robust cash flow. The separations are anticipated to be completed within 18 to 24 months, pending necessary approvals.

The new DuPont will include existing Water & Protection segment businesses, most Industrial Solutions businesses, and retained Corporate businesses, with net sales of $6.6 billion in 2023. The Electronics company will consist of Semiconductor Technologies, Interconnect Solutions, and electronics-related product lines, generating $4.0 billion in net sales in 2023. The Water company will focus on DuPont's Water Solutions business with net sales of about $1.5 billion in 2023. Leadership changes include Lori Koch succeeding Edward Breen as DuPont's CEO from June 1, 2024, with Antonella Franzen appointed as the new CFO.

This strategic reorganization has already had a positive financial impact, with DuPont shares rising by 5% in afterhours trading following the announcement. The company expects to maintain strong financials post-split, with New DuPont targeting an operating EBITDA margin of about 24% in 2023. Each new company will have greater flexibility to pursue focused growth strategies, including M&A activities. The executive leadership of the separate companies will be announced before the completion of the split, ensuring a smooth transition and continued focus on growth and innovation in their respective markets.