DuPont to Explore Divestiture of Its Transportation Unit
No final decisions have been made and DuPont could elect to keep the unit, the people said.
(Bloomberg) -- DuPont de Nemours Inc., unloading assets following the breakup of chemicals giant DowDuPont Inc., is considering a divestiture of its transportation and industrial unit, according to people familiar with the matter.
The company is working with advisers to review strategic options for the business, said the people, who asked not to be identified because the information is private. One possible partner for the unit could include Celanese Corp., which has a complementary engineered materials segment and is undertaking its own strategic review, one of the people said.
No final decisions have been made and DuPont could elect to keep the unit, the people said.
DuPont gained as much as 2.4% in after-market trading in New York Thursday. The stock rose 1.8% to close at $71.61, giving the company a market value of about $53 billion.
Representatives for DuPont and Celanese declined to comment.
Transportation and industrial has been DuPont’s third-largest division by revenue this year, according to company filings. The unit, which makes automobile adhesives and silicone tubing for medical labs, had sales of $3.8 billion in the nine months ended Sept. 30.
It generated $1.5 billion of adjusted earnings before interest, taxes, depreciation and amortization in 2018, according to data compiled by Bloomberg.
A divestiture would be the latest dramatic overhaul of DuPont’s portfolio after the breakup this year of DowDuPont, which had been formed in 2017 in the largest chemicals industry merger ever.
The Wilmington, Delaware-based company, led by Chairman Ed Breen, was already considering unloading its nutrition and biosciences division, which could be worth at least $25 billion, Bloomberg News has reported.
DuPont, looking to salvage shareholder value in the face of slowing markets, said in May that it would seek to sell six non-core businesses with $2 billion in revenue.
DuPont spun off agriculture business Corteva Inc. in June following an April split with Dow Inc. as part of the planned breakup of DowDuPont. The independent DuPont agreed in September to sell its compound semiconductor division for $450 million.
To contact the reporters on this story: Kiel Porter in Chicago at kporter17@bloomberg.net;Myriam Balezou in London at mbalezou@bloomberg.net;Richard Clough in New York at rclough9@bloomberg.net
To contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Matthew Monks, Josh Friedman
©2019 Bloomberg L.P.