DuPont will split into three companies

On May 22nd local time, American chemical giant DuPont announced plans to split into three independent listed companies in the next 18-24 months to optimize operational efficiency and enhance shareholder value. On the same day, a senior personnel change was also announced.

DuPont announced in a statement that it will split its electronics, water, and industrial businesses into three independent listed companies through tax-free transactions.

New DuPont will become a diversified industrial company, consisting of water and protection businesses (excluding water solutions), most of the industrial solutions division's businesses (including healthcare), and existing businesses retained within the company. In 2023, these businesses generated approximately $6.6 billion in net sales.

The electronics company will mainly consist of existing semiconductor technology, interconnect solutions business, and electronic related product lines in industrial solutions. In 2023, this business generated approximately $4 billion in sales, with major end markets including artificial intelligence (AI) chips, digital displays, printed circuit boards, and consumer electronics products.

The water company will consist of DuPont's current water solutions business, generating approximately $1.5 billion in sales in 2023. This mainly includes advanced technologies in the fields of reverse osmosis, ion exchange, and ultrafiltration, with application markets including emerging technologies such as industrial water treatment, municipal water treatment, life sciences, and direct lithium extraction.

"This is an excellent opportunity to achieve long-term and sustainable shareholder value by creating three strong industry-leading companies," said Ed Breen, Executive Chairman and CEO of DuPont. The tripartite split will release incremental value for shareholders and customers, as well as create new opportunities for employees. Each company will have greater flexibility to pursue its key growth strategy, including promoting business portfolio optimization through mergers and acquisitions.

In addition to restructuring, DuPont has also announced a senior personnel change: starting from June 1st, current CFO Lorry Koch will take over as CEO, and current CEO Pruitting will remain as Executive Chairman. Once the split is completed, Koch will continue to serve as the CEO of the new DuPont company.

This split is already DuPont's second large-scale restructuring within 5 years. In 2019, Dow DuPont, formed by the merger of DuPont and Dow Chemical, was split into three independent companies: DuPont, Dow Chemical, and the agricultural company Kodiawa. In recent years, DuPont has acquired or divested some important assets, such as the sale of transportation and materials business, nutrition and bioscience business, homoformaldehyde business, acquisition of Laird high-performance materials company Spectrum Plastic Group, etc.

Financial data shows that DuPont's net sales in 2023 were $12.1 billion, a year-on-year decrease of 7%; The operating EBITDA was $2.9 billion, a decrease of 10% year-on-year. DuPont expects net sales to be between $12.1 billion and $12.4 billion in 2024, with operating EBITDA between $2.9 billion and $30.5 billion.