CNN
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DuPont de Nemours, the American multinational chemical company that traces its history back to 1802, announced plans to split into three publicly traded companies on Wednesday.
The company plans to spin off its electronics and water businesses into their own yet-to-be-named companies in a transaction that is tax-free to shareholders. DuPont said it expects to complete the breakup transactions within the next 18 to 24 months, and it is subject to final approval by DuPont’s board of directors.
The announcement also included a shakeup in leadership: Effective June 1, DuPont’s chief financial officer, Lori Koch, will step into the CEO role. DuPont’s current CEO, Ed Breen, will stay on as executive chairman. Koch will remain CEO of the new, slimmed-down DuPont once the spin-offs are complete, according to the company.
DuPont’s breakup comes amid other large, multi-national companies announcing breakups in recent years, with many CEOs and corporate boards touting the agility of smaller companies.
In a statement, Breen echoed a similar refrain, saying the three smaller companies would have greater flexibility after the spin-off.
“The three-way separation will unlock incremental value for shareholders and customers and also create new opportunities for employees,” he said. “Critically, each company will have greater flexibility to pursue their own focused growth strategies, including portfolio enhancing M&A (mergers and acquisitions).”
In the last several years, major American companies like J&J, Kellogg and General Electric announced company break-ups and spin-offs, signaling a preference for smaller, more nimble companies over the conglomerates that gained prominence in previous decades.
This is the second DuPont breakup in half a decade. In 2019, DowDuPont, which was created in a DuPont merger with Dow Chemical, broke apart into three separate entities: DuPont, Dow Chemical and Corteva, the company’s agriculture business.
On Wednesday, DuPont said the newly formed electronics company would focus on “semiconductor solutions and advanced electronics products,” while the new water company would be “a comprehensive water solutions provider.” The leftover divisions will remain as part of DuPont.