On Wednesday, DuPont de Nemours, the American multinational chemical company with a history dating back to 1802, announced plans to split into three separate publicly traded companies. The company intends to create new entities for its electronics and water businesses through tax-free transactions for shareholders. The breakup is expected to be completed within the next 18 to 24 months pending final approval by DuPont’s board of directors.
As part of the announcement, there was also a change in leadership. Effective June 1, DuPont’s chief financial officer, Lori Koch, will become the CEO, while the current CEO, Ed Breen, will transition to the role of executive chairman. Koch will continue as CEO of the newly streamlined DuPont once the spin-offs are finalized.
The decision to break up DuPont falls in line with a trend of large multinational companies opting for division separations in recent years. Many CEOs and corporate boards have emphasized the strategic advantages and flexibility offered by smaller, more focused companies. Breen highlighted the potential value and opportunities for shareholders, customers, and employees with the proposed three-way separation.
Several major American companies, including J&J, Kellogg, and General Electric, have previously pursued company break-ups and spin-offs in favor of smaller, more agile operations. This will mark the second split for DuPont in the last five years, following the 2019 separation of DowDuPont into DuPont, Dow Chemical, and Corteva.
In the upcoming restructuring, the new electronics company will concentrate on semiconductor solutions and advanced electronics products, while the water company will focus on providing comprehensive water solutions. The remaining divisions will be retained as part of DuPont’s operations.