30 August 2012 17:02 [Source: ICIS news]
HOUSTON (ICIS)--DuPont is not ruling out further divestments following a deal on Thursday to sell its performance coatings business for $4.9bn (€3.9bn) in cash, the company’s CEO said on Thursday.
“Every quarter we take a look at the portfolio, you will always see us do little things,” Ellen Kullman told analysts in a webcast briefing on DuPont’s agreement to divest the performance coatings business to Carlyle.
Divestments are “part of the process” as DuPont continues to transform its business to focus on high-growth, high-margin markets in agriculture and nutrition, advanced materials and biotechnology, Kullman said.
Asked if DuPont may next divest its performance materials business, Kullman said that while that business’s sales growth was at the lower end of DuPont’s targets, in terms of long-term margins the business was “doing great”.
“I think performance materials is an area where three, four, five years from now you are going to see a very different set of products,” Kullman said, pointing to DuPont’s work in areas such as light-weight materials for vehicles, high-temperature polymers, as well as renewable materials.
DuPont chief financial officer Nick Fanandakis said that the company plans to eliminate general corporate overhead costs that were previously allocated to the performance coatings business but that are not part of the sale to Carlyle.
He did not disclose the amount of those overheads or timelines for their elimination, but he said that details would be provided during DuPont’s third-quarter earnings announcement in October, when the company will also update its full-year 2012 guidance.
Fanandakis said that DuPont would use proceeds from the coatings divestment to strengthen its balance sheet. DuPont may also return cash to shareholders, “unless we have a compelling opportunity within the company,” he said.
Kullman noted that with the divestment of performance coatings, DuPont reduces its exposure to Europe. DuPont had built out its coatings business in Europe in 1999 when it acquired the Herberts coatings business in ?xml:namespace>
DuPont’s share price was down slightly by 0.32% or 16 cents to $49.78/share at 10:46 hour local time on the New York Stock Exchange.
($1 = €0.80)
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