DuPont to Separate into Three Independent, Publicly Traded Companies

DuPont announced a plan to separate into three distinct, publicly traded companies. Under the plan, DuPont would execute the proposed separations of its Electronics and Water businesses in a tax-free manner to its shareholders with New DuPont continuing as a premier diversified industrial company following completion of the separations.

As independent entities, both Electronics and Water will benefit from increased focus and agility in their respective industries. At separation, each of the three companies will have strong balance sheets, attractive financial profiles and compelling growth opportunities.

As leading standalone companies, each business is expected to benefit from:
• An ability to tailor capital allocation strategies to pursue differential strategic growth objectives
• Enhanced strategic flexibility to pursue portfolio enhancing M&A
• Compelling investment profiles appealing to different investor bases
• Distinct boards of directors and management teams comprised of world-class leaders with track records of driving value creation in each specific industry

“This is an extraordinary opportunity to deliver long-term, sustainable shareholder value through the creation of three strong, industry-leading companies,” said Ed Breen, DuPont executive chairman and CEO. “Critically, each company will have greater flexibility to pursue their own focused growth strategies, including portfolio enhancing M&A.”

Overview of Three Leading Standalone Companies

• New DuPont: A Diversified Industrial Company with a Portfolio of Iconic Brands and Solutions

New DuPont will be a premier diversified industrial company powered by deep materials science and application engineering expertise, industry-leading innovation, top-tier manufacturing capabilities, and iconic brands such as Tyvek, Kevlar and Nomex. New DuPont will have a strong presence in fast-growing healthcare end-markets including applications for biopharma consumables, medical devices, and medical packaging.

The company will also be a leading provider of key technologies enabling advanced mobility particularly within electric vehicles. Finally, New DuPont will remain a provider of advanced solutions serving safety, construction, aerospace and other industrial-based end-markets.

New DuPont will be comprised of the existing businesses within the Water & Protection segment (excluding Water Solutions), the majority of businesses within Industrial Solutions (including healthcare), and the retained businesses reported in Corporate (including adhesives). These businesses generated net sales of approximately $6.6 billion and operating EBITDA margin(1) of approximately 24% in 2023.

• Electronics: A Global Leader for Electronic Materials including Semiconductor Solutions and Advanced Electronics Products

Electronics will be a leading global provider of differentiated electronics materials including key consumables used in semiconductor chip manufacturing, as well as advanced electronic materials enabling reliable signal integrity, power management and thermal management.

The company will be well positioned to capture growth in the semiconductor industry, driven by high-performance computing demands from AI, high speed connectivity, smart and autonomous vehicles and the Internet of Things, among other mega-trend growth drivers.

Electronics will be comprised of the existing Semiconductor Technologies and Interconnect Solutions lines of business, as well as the electronics-related product lines from Industrial Solutions. These businesses generated net sales of approximately $4 billion and operating EBITDA margin of approximately 29% in 2023.

• Water: A Comprehensive Water Solutions Provider with Leading Filtration Technologies

Water will be a global technology leader with a comprehensive portfolio of water filtration and purification solutions with leading technologies in reverse osmosis, ion exchange and ultrafiltration. Its solutions provide critical components and systems that generate clean and fit-for-purpose water across a variety of market segments including industrial water and energy, life sciences and specialties, municipal and desalination, and residential and commercial.

Water will be comprised of DuPont’s current Water Solutions line of business which generated net sales of approximately $1.5 billion and operating EBITDA margin of approximately 24% in 2023.

Separation Transactions Detail

DuPont expects to execute the proposed separations of Electronics and Water in a way that will be tax-free for DuPont shareholders for US federal income tax purposes.

DuPont expects to complete the separations within 18 to 24 months. The separation transactions will not require a shareholder vote and are subject to satisfaction of customary conditions, including final approval by DuPont’s Board of Directors, receipt of tax opinion from counsel, the filing and effectiveness of Form 10 registration statements with the US Securities and Exchange Commission, applicable regulatory approvals and satisfactory completion of financing.

It is anticipated that all three companies will have strong balance sheets and will be capitalized to provide the financial flexibility to take advantage of future growth opportunities. New DuPont is expected to maintain its investment grade credit rating.

Leadership Updates

DuPont announced the following leadership appointments, effective June 1, 2024:
• Lori Koch, current CFO, is appointed CEO, succeeding Ed Breen who will retain his role of executive chairman.
• Antonella Franzen, current CFO of DuPont’s Water & Protection segment, is appointed CFO.

Following completion of the separations, Koch and Franzen will remain in their respective positions for New DuPont.