Hello all,
This week’s announcement that listed top executives for DuPont and Corteva Agriscience shows that the process of spinning off the two companies from DowDuPont is on track.
We also learned that DowDuPont CEO Ed Breen will stick around at DuPont. He will serve as a full-time executive chairman with responsibilities that include the company’s business portfolio and allocation of capital.
The move will bring a sigh of relief from investors who did want Breen to head back to semi-retirement in that CEO haven of Florida. Breen was brought in as a DuPont board member in response to a proxy battle waged by activist investor Nelson Peltz. He later took over from Ellen Kullman as CEO.
Even after some big cuts and a merger/spinoff with Dow, investors believe that Breen can carve out more value at DuPont by selling off some of its businesses that are not stellar performers or units in hot industries that can command high prices. “Bolt-on” acquisitions followed by sales of the spiffed-up business are another option.
Breen is skilled at such tasks, as shown by his long stint as CEO of Tyco, a company riddled with a host of unrelated businesses and problems that included a former CEO going to prison for engineering illegal corporate perks that helped to maintain a lavish lifestyle.
Some clues on the future might come from Breen’s time at Tyco.
Breen turned around that mess of a company, selling off many of its business and moving its focus to a couple of strengths, including security systems.
Tyco ended up merging with Johnson Controls, a diversified company best known for industrial controls and batteries.
The good news that we have seen in the Breen era comes in local investments include the relocation and expansion of the Tralee plant near Newark and a substantial investment in the Experimental Station.
DuPont is in much better shape than Tyco, but in the current environment, expect more asset sales.
Enjoy this beautiful day. Read on. – Doug Rainey, publisher.
