DuPont Mulls Textile Spinoff
DuPont Co. could spin off its $6.5-billion textiles and interiors business as part of a broad corporate restructuring announced Monday.
After years of trying to position itself as a science company, DuPont’s latest plan calls for it to reorganize into five specialized businesses and create a textiles and interiors unit that later could be sold through an initial public offering.
Long concerned about DuPont’s lackluster profit, investors reacted positively to the announcement, sending shares of the Wilmington, Del.-based company up more than 4% on the New York Stock Exchange. Shares of DuPont rose $1.84 to close at $44.56 on the New York Stock Exchange.
The textiles and interiors business, which has been hurt by stiff competition from abroad, would boast $6.5 billion in sales--23% of the company’s total sales--and would be the world’s largest integrated fiber concern.
DuPont hired Morgan Stanley to study the possible spinoff and hopes to separate the textiles and interiors business by late next year, it said.
Expenses relating to the separation would be covered by “aggressively” cutting costs in the company’s corporate and support services.
The concern includes Lycra fabrics and Stainmaster carpets and the polyester and nylon business of DuPont, which invented nylon in the late 1930s.
DuPont has sold its pharmaceuticals unit to Bristol-Myers Squibb Co. and completed its spinoff of Conoco Inc. in 1999, divesting itself of the oil and gas company it acquired for $7.6 billion in 1981.
DuPont’s announcement came the same day Eastman Chemical Co. canceled plans to spin off its specialty chemicals and plastics business.
DuPont also has been hard hit by low prices for its chemicals and plastics in the face of the U.S. economic recession.
It now plans to divide into five businesses in addition to creatingthe textiles and interiors subsidiary.
The five businesses would be electronic and communications technologies; performance materials; coatings and color technologies; agriculture and nutrition; and safety.
