ADVERTISEMENT

Dupont to Explore Divestiture of Electronics Unit

Dupont to Explore Divestiture of Electronics Unit

(Bloomberg) -- DuPont de Nemours Inc., fresh off a $26.2 billion deal to offload its nutrition business, is weighing a divestiture of its electronics unit, according to people familiar with the matter.

The company is working with advisers to review strategic options for the business, including a sale or spinoff, said the people, who asked not to be identified because the information is private. It’s also considering a so-called Reverse Morris Trust, or merger with another company structured to be tax-free, the people said.

No final decisions have been made and DuPont could elect to keep the unit, they said.

A representative for DuPont declined to comment.

DuPont electronics and imaging specializes in materials for semiconductors, light-up displays and sensors. The business generated sales of $2.6 billion through the first three quarters of 2019, accounting for about 16% of the company’s total revenue, according to filings. DuPont is set to report fourth-quarter and full-year results on Jan. 30.

A divestiture of the unit would effectively complete a full breakup of the chemicals maker. DuPont, which had four primary business lines following the split of DowDuPont Inc., agreed last month to sell its nutrition division to International Flavors & Fragrances Inc. in a deal structured as a Reverse Morris Trust.

The company is also weighing a divestiture of its transportation and industrial unit, Bloomberg News reported in November.

The potential sales would add to the deal-making reputation of DuPont Chairman Ed Breen, who engineered the 2012 breakup of Tyco International and oversaw the 2000 sale of General Instrument. More recently, Breen led the 2017 tie-up of DuPont and Dow Chemical Co., the largest chemicals industry merger ever, and subsequent breakup that formed a standalone DuPont, Dow Inc. and Corteva Inc.

The shares rose as much as 2.2% in New York trading. They were up 1.3% to $61.92 at 12:37 p.m., giving the company a market value of about $45.9 billion. The shares have fallen about 21% in the past year.

Struggling with slow markets lately, the company said in May that it would sell six non-core businesses, representing $2 billion in revenue, that were deemed too volatile.

--With assistance from Richard Clough.

To contact the reporters on this story: Kiel Porter in Chicago at kporter17@bloomberg.net;Myriam Balezou in London at mbalezou@bloomberg.net

To contact the editors responsible for this story: Daniel Hauck at dhauck1@bloomberg.net, ;Liana Baker at lbaker75@bloomberg.net, Matthew Monks

©2020 Bloomberg L.P.