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DuPont Names Two New Directors to Board

February 5, 2015
Energy & Chemical Value Chain
DuPont Co. named two new directors to its board with experience in corporate breakups and restructurings, a move that comes as the chemicals company faces pressure from activist investor Trian Fund Management LP to split itself up.
 
The company said Edward Breen, who is currently chairman of Tyco International PLC, and James Gallogly, the previous chief executive of LyondellBasell Industries NV, would join the board effective immediately.
 
DuPont’s conglomerate structure and diverse business portfolio have come under scathing attack from Trian over the past 18 months, and the activist said last month that it would seek four seats on DuPont’s board.
 
A representative from Trian, which is headed by Nelson Peltz, wasn’t immediately available for comment on Thursday’s board changes.
 
DuPont said it reviewed all of Trian’s proposed nominees, and the board concluded there was one it would consider, if Trian were to withdraw its slate and support DuPont’s candidates.
 
However, the company said Trian refused to consider any proposal that didn’t involve Mr. Peltz himself joining the DuPont board.
 
Trian has argued the company’s share value could effectively double if it split itself into three—one aimed at agriculture and nutrition, another for industrial materials and a third for performance chemicals, which produces materials that go into things like nonstick frying pans and house paint.
 
Mr. Breen has experience with corporate breakups. He was chairman and chief executive CEO of Tyco International from 2002 to 2012, during which he oversaw two breakups of the company resulting in the spinoffs of Covidien, Tyco Connectivity, ADT Corp. and the merger of Tyco Flow Control with Pentair , DuPont said.
 
For his part, Mr. Gallogly led LyondellBasell through the bankruptcy process, along with a restructuring at the chemical company that included cutting its staff by 20% and other cost reductions. LyondellBasell exited the bankruptcy process in less than a year and is now the third-largest independent chemical manufacturer in the U.S., DuPont says.
 
The board appointments come as two current directors, Curtis Crawford and Richard Brown, transition off the DuPont board to eventually serve as directors at Chemours Co., DuPont’s performance chemicals business that is being spun off.
 
DuPont last week gave a disappointing outlook for 2015, saying its earnings would take a significant hit from the strengthening dollar, though the chemicals company indicated it would hit its goal to cut $1 billion in costs well ahead schedule.
 
As part of the effort, DuPont is planning to spin off its performance chemicals segment—best known for materials in nonstick frying pans and house paints—this year. DuPont has said it plans to use the proceeds of the spinoff to repurchase up to $4 billion in shares.
 
By Lauren Pollock
 

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