If you have an ACS member number, please enter it here so we can link this account to your membership. (optional)

ACS values your privacy. By submitting your information, you are gaining access to C&EN and subscribing to our weekly newsletter. We use the information you provide to make your reading experience better, and we will never sell your data to third party members.



Trian Says DuPont Must Do More

The hedge fund believes DuPont should split into three different firms

by Alexander H. Tullo
September 22, 2014 | A version of this story appeared in Volume 92, Issue 38

The activist investor that has amassed a nearly 3% stake—worth $1.6 billion—in DuPont is unhappy with the pace and breadth of DuPont’s restructuring moves. Trian Fund Management says the Wilmington, Del.-based giant needs a more aggressive approach if it wants to significantly boost returns to shareholders.

In a letter to DuPont’s board, Trian’s partners, including founder Nelson Peltz, outline a plan that they say could double the value of DuPont’s shares—worth more than $60 billion today—within three years.

The Trian partners praise recent DuPont moves, including the planned spin-off of its performance chemicals business into a new company that would operate long-held DuPont businesses such as titanium dioxide and fluorochemicals.

Trian suggests that DuPont should further split into two more companies. One would be a high-growth firm that would operate DuPont’s agriculture, nutrition and health, and industrial biosciences businesses. The other would be a cyclical, high-cash-generating company that would house its performance materials, electronic chemicals, and safety and protection businesses.

Trian argues that DuPont’s conglomerate structure holds the company back by adding between $2 billion and $4 billion annually in unnecessary costs. DuPont, Trian points out, even operates a hotel, a theater, and a country club. “We can no longer be silent as DuPont continues to struggle to execute what we are convinced is a flawed business plan,” they write.

In response, DuPont says it has had a “constructive dialogue with Trian” but also notes that it has earned a 220% return for shareholders since 2008, versus 144% for the S&P 500 Index. In its statement, it also highlights a $1 billion cost reduction initiative as well as a $5 billion share buyback program.


This article has been sent to the following recipient:

Chemistry matters. Join us to get the news you need.