DuPont plans Textile Unit IPO
WILMINGTON, Del. -- DuPont Co. (NYSE:DD) is considering an initial public offering (IPO) of its $6.5 billion textiles and interiors business, which makes Stainmaster carpets, as part of a restructuring plan announced last week by the largest chemical company in the U.S.
DuPont's plan calls for it to reorganize into five specialized businesses and create a separate textiles and interiors subsidiary. By the end of next year it hopes to launch the IPO of the unit, but has not ruled out other options such as an outright sale or spinoff.
The growth platforms are: DuPont Electronic & Communication Technologies; DuPont Performance Materials; DuPont Coatings & Color Technologies; DuPont Safety & Protection; and DuPont Agriculture & Nutrition.
"Consistent with our long-term strategy and direction, our growth platforms will be more tightly focused on markets and technologies," said DuPont Chairman and CEO Charles O. Holliday, Jr. "This will enable faster execution and improved capability for innovation and shareholder value creation."
The new wholly owned subsidiary, DuPont Textiles & Interiors, will include the nylon fibers, polyester fibers and Lycra brand fiber businesses, plus their intermediates and joint ventures. The company also will consider a full range of options for DuPont Textiles & Interiors, including an IPO, with the ultimate intent of separation by year-end 2003, market conditions permitting. DuPont has hired Morgan Stanley to study options for the textiles and interiors business, which boasts $6.5 billion in annual sales--23 percent of all sales at DuPont. The unit has been hurt recently by stiff competition from abroad.
Beyond Lycra and Stainmaster, the concern includes the polyester and nylon business of DuPont, which invented nylon in the late 1930s. DuPont is marking its 200th anniversary this year. It has already 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.
"A company can operate successfully for 200 years only by continually reinventing itself," Holliday said. "DuPont people in all of our businesses know this is key to a strong future. Each of the five growth platforms has the critical mass to pursue our strategies of integrated science, knowledge intensity and productivity improvement while capitalizing on strong market positions, quality products and powerful brands. At the same time, our new Textiles & Interiors subsidiary will have the scale, global reach and flexibility to be highly successful in an industry undergoing fundamental structural change."
Two hundred years ago, DuPont (www.dupont.com) was primarily an explosives company. One hundred years ago, its focus turned to global chemicals, materials and energy. Today, entering its third century, DuPont deliver science-based solutions that make real differences in real lives.