DuPont to split into three companies, Breen to step down

DuPont CEO Ed Breen will be stepping down as the company’s leader as of June 1. The news came right as DuPont announced it would be splitting into three companies, including “New DuPont.” | DBT PHOTO BY KATIE TABELING

WILMINGTON — DuPont has announced it will separate into three separate, publicly traded companies, according to press releases distributed late Wednesday afternoon. 

The move will separate the electronics and water business into two unique entities while the mainstay company, DuPont, continues to focus on applied engineering, manufacturing, health care and products in construction, aerospace and other industrial-based end-markets. 

The separation is expected to be complete between late 2025 and June 2026.

At the same time, DuPont CEO Ed Breen announced he will step down from leading Delaware’s iconic company on June 1. He will continue to serve full-time as the chairman of DuPont’s board of directors. To succeed him, DuPont has named current Chief Financial Officer Lori Koch as its next leader.

Breen said the news of DuPont dividing its company into three separate entities offered an “extraordinary opportunity” to deliver value to shareholders.

“The three-way separation will unlock incremental value for shareholders and customers and also create new opportunities for employees. Critically, each company will have greater flexibility to pursue their own focused growth strategies, including portfolio enhancing mergers and acquisitions,” he said in a prepared statement.

DuPont will be spinning off its electronics division which includes its electronic materials and budding semiconductor chip business. Over the years, DuPont has been investing heavily in semiconductor manufacturing, including opening a new plant in Newark last November and ongoing plans to open a $50 million plant in Glasgow.

DuPont’s key end markets for electronics also included components that allowed devices to connect to Wi-Fi or Bluetooth. The company reported that these product lines and semiconductor tech generated net sales of $4 billion in 2023.

This spin off aims to capture growth driven by high-performance computing demands from artificial intelligence and high-speed internet connectivity, as well as autonomous cars.

Meanwhile, DuPont’s water solutions company will hold its comprehensive portfolio of water filtration and purification solutions featuring products that focus on reverse osmosis, ion exchange and ultrafiltration. Products include critical components and systems to generate clean water for many markets such as industrial water and energy, as well as life sciences and residential and commercial use. DuPont reported this division generated $1.5 billion in sales.

Separating the two segments from DuPont leaves “New DuPont,” which will continue to manufacture iconic brands like Tyveck, a lightweight product that ranges in use from protective gear to industrial packaging, to bullet and knife-resistant Kevlar. In addition, DuPont will have a strong presence in biopharma consumables, medical devices and medical packaging, as well as devices in electric vehicles, like Nomex which protects their engines from overheating. 

The existing portfolio that will soon make up “New DuPont” generated $6.6 billion sales last year.

DuPont stock jumped 5% after the stock market closed on Tuesday, and shares were expected to trade at $82.90 before the market opened on Wednesday morning.

New Leaders for New DuPont

This is not the first time Delaware’s largest manufacturing company has spun off some of its departments into stand-alone companies. Chemours spun off in 2015 from DuPont’s performance chemicals department. Corteva, its agriscience division, spun out three years later and has since moved its headquarters to Indianapolis.

This move also signals a major shift in leadership, as Breen, who was a major player in DuPont’s brief merger with Dow and the following split of its divisions, will no longer be at the helm. 

Breen first ascended to the CEO role in 2015  where he immediately began work to merge with massive chemical manufacturer Dow. When DowDuPont was created, it became the world’s largest chemical maker in terms of annual sales. Breen served as DowDuPont’s CEO for its duration.

Less than 18 months after the merger was completed, however, the mega-company would be split up into three spinoff companies – DuPont, Corteva and Dow – after it struggled to produce annual growth for its shareholders. Breen later earned the nickname “the break-up expert” from the Wall Street Journal. Breen stepped down from his role as CEO after the split was finalized in June 2019. He later returned to DuPont in 2020 when the company employed 3,500 people in Delaware and thousands more around the world.

“As Executive Chairman and CEO of DuPont, Ed Breen has guided the company through a significant chapter of transformation and value creation. We are grateful for his leadership,” Alexander M. Cutler, DuPont’s Lead Independent Director, said in a prepared statement. “The Board believes that Lori Koch is an ideal leader for the next phase of the company’s journey and is pleased that Ed will continue serving as a trusted partner to her.”

Koch has served as DuPont’s CFO since 2020. Before that, she was the company’s vice president of investor relations and corporate financial planning and analysis. She also served as the director of investor relations of the E. I. DuPont de Nemours and Company, as well as its global finance director of performance materials business.

“I am honored to be appointed as the next CEO of DuPont, and I’m excited about our company’s future,” Koch said. “It’s been a privilege to have worked side-by-side with Ed these past several years, and I look forward to working with him, Antonella, and our DuPont colleagues around the world in continuing to drive value for our customers, employees, shareholders, and communities.”

Koch will see her salary raised to $1.2 million, including a bump in her target short-term incentive program to 150% of her new base salary, according to filings with the U.S. Securities and Exchange Commission. She was also approved for the grant of equity awards valued at $6 million. About 40% of those funds will be awarded through time-based restricted stock per year over the course of three years. The 60% will be offered through performance-based restricted stock units at the end of three years if performance and employment criteria are satisfied.

In addition, Antonella B. Franzen, the company’s water and protection segment chief financial officer, has been named as DuPont’s next chief financial officer.

Franzen will be paid a salary of $700,000, with bumps in her short-term incentive program. She also received grants of equity awards valued at $2 million, to be distributed in the same way as Koch’s awards. 

Editor’s note: this story has been updated to include stock information and more information about DuPont CEO Ed Breen.