DuPont Co. (DD:US), the biggest U.S. chemical maker by market value, plans to spin off its performance-chemicals unit as part of efforts by the company to boost shareholder value and focus on higher-margin businesses.
The tax-free spinoff will be completed in about 18 months, after which DuPont investors will hold all of the new company, Wilmington, Delaware-based DuPont said today in a statement. The company anticipates costs from the transaction will be 1 cent to 2 cents a share in the fourth quarter.
DuPont first said in July it might spin off the unit because of slow-growing, volatile earnings. The business is the world’s biggest producer of titanium dioxide, a white pigment used in paint. It also produces cyanide, Freon refrigerants and Teflon coating for nonstick pans.
DuPont Chairman and Chief Executive Officer Ellen Kullman has been under pressure to improve the company’s performance from Trian Fund Management LP. The New York-based hedge fund, co-founded by activist Nelson Peltz, increased its stake to more than 21 million shares, or about 2.3 percent, and met top DuPont executives to discuss ways to boost shareholder value, people familiar with the matter said in August.
DuPont’s announcement was made after regular trading ended in New York, where the shares rose 3.5 percent to $63.51 at 4:40 p.m. The shares (DD:US) climbed 36 percent this year through the close of trading today.
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