DuPont Split Will Create Three Separate Companies: What To Know
DuPont announced plans to split into three publicly traded companies. Here's what you need to know.
DuPont de Nemours (DD) is making headlines Thursday after the global chemicals company announced its intention to split into three independent, publicly traded companies.
Over the next 18 to 24 months, DuPont will separate its Electronics and Water businesses from its core business. New DuPont will continue operating as a diversified industrial company while the new independent entities will "benefit from increased focus and agility in their respective industries," DuPont said in a press release announcing its spinoff plans. All three companies will have "strong balance sheets, attractive financial profiles and compelling growth opportunities," it added.
"This is an extraordinary opportunity to deliver long-term, sustainable shareholder value through the creation of three strong, industry-leading companies," DuPont CEO Ed Breen said in a statement.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
In addition to creating shareholder value, the separation will create new opportunities for employees, DuPont explained. "Critically, each company will have greater flexibility to pursue their own focused growth strategies, including portfolio enhancing M&A [mergers and acquisitions," the firm added.
Here's a breakdown of how each of the separate companies will look:
- New DuPont: This will be a diversified industrial company with brands such as Tyvek, Kevlar and Nomex. It will have a significant presence in the healthcare, electric vehicles and industrial sectors. The businesses within New DuPont generated sales of approximately $6.6 billion in 2023.
- Electronics: This company will specialize in electronic materials, including those used in semiconductor chip manufacturing, power management and thermal management. In 2023, this business achieved approximately $4.0 billion in sales.
- Water Solutions: This company will be a global leader in water technology with a portfolio including water filtration and purification solutions with leading technologies in reverse osmosis, ion exchange and ultrafiltration. This company will provide critical components and systems for multiple industries and generated approximately $1.5 billion in sales in 2023.
DuPont also announced that Lori Koch, currently the company's chief financial officer, will take over as CEO of DuPont on June 1. The company plans to announce the leadership teams of the new companies in advance of their separations.
DD's plan to separate follows in the footsteps of former industrial conglomerate General Electric – now GE Aerospace (GE) – which completed its massive three-way spinoff in early April.
Is DuPont a buy, sell or hold?
Analysts are mostly upbeat toward the materials stock. According to S&P Global Market Intelligence, the consensus analyst target price for DD stock is $83.72, representing implied upside of about 6% to current levels. Meanwhile, the consensus recommendation is a Buy.
Financial services firm UBS is one of the more bullish outfits on DuPont and sees the planned separation as a way to unlock value for shareholders.
"We see this as positive for the group and expect this to drive a higher value realization for the Electronics and Water businesses in particular, which we see as the most undervalued in the portfolio," UBS Global Research firm analyst Joshua Spector wrote in a note.
Specter rates DuPont a Buy with a $93 price target, representing implied upside of nearly 20% to current levels.
Related Content
-
Is Home Insurance Tax Deductible?With home insurance rates on the rise, you might be hoping to at least claim the cost as a tax deduction. Here's what you need to know ahead of tax season.
-
The December Jobs Report Is Out. Here's What It Means for the Next Fed MeetingThe December jobs report signaled a sluggish labor market, but it's not weak enough for the Fed to cut rates later this month.
-
Trump Signals Plan to Ban Institutional Investors From Buying Single-Family HomesThe president says the move could improve housing affordability. Here’s what the data shows about investor ownership, recent buying trends and what it could mean for homebuyers.
-
The December Jobs Report Is Out. Here's What It Means for the Next Fed Meeting
The December jobs report signaled a sluggish labor market, but it's not weak enough for the Fed to cut rates later this month.
-
4 Simple Money Targets to Aim for in 2026 (And How to Hit Them), From a Financial PlannerWhile January is the perfect time to strengthen your financial well-being, you're more likely to succeed if you set realistic goals and work with a partner.
-
I'm a Wealth Adviser: Everyone Needs an Estate Plan (Seriously, Even You)If you've acquired assets over time, even just a home and some savings, you have an estate. That means you need a plan for that estate for your beneficiaries.
-
How to Be a Smart Insurance Shopper: The Price Might Be Right, But the Coverage Might Not BeChoosing the cheapest policy could cost you when you have a loss. You'll get the best results if you focus on the right coverage with the help of a good agent.
-
7 Reasons Why Your Portfolio Needs Short-Term Bond ETFsMoney market funds are a safe option for your cash, but ultra-short and short-term bond ETFs also deserve consideration. Here are seven reasons why.
-
Nasdaq Takes a Hit as the Tech Trade Falters: Stock Market TodayThe Dow Jones Industrial Average outperformed on strength in cyclical stocks.
-
I'm a Wealth Planner: Forget 2026 Market Forecasts and Focus on These 3 Goals for Financial SuccessWe know the economy is unpredictable and markets will do what they do, no matter who predicts what. Here's how to focus on what you can control.
-
I'm a Financial Adviser: Why In-Person Financial Guidance Remains the Gold StandardFace-to-face conversations between advisers and clients provide the human touch that encourages accountability and a real connection.
