Is A DuPont-Pioneer Split On The Horizon Following CEO’s Departure?

The abrupt departure of the top executive at chemical and seed giant DuPont has reignited the debate over whether the conglomerate should be broken apart, a move that could throw into question the future of one of Iowa’s largest employers, DuPont Pioneer, reports Christopher Doering and Donnelle Eller at DesMoinesRegister.com.

DuPont, which has been in an ongoing battle with activist investor Nelson Peltz, said this week that its chief executive Ellen Kullman will retire October 16 after nearly three decades with the Delaware-based company.

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Edward Breen, a member of DuPont’s board of directors who once oversaw the breakup of diversified manufacturer Tyco International, will take over as interim chairman and CEO while the board searches for a full-time replacement.

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Shares in the company, founded in 1802 to make gunpowder, surged 7.7% to $55.21 Tuesday following news of Kullman’s departure.

“The buzz is definitely all about (a possible split),” Matt Arnold, a St. Louis-based analyst at Edward D. Jones & Co., said Tuesday. “That’s why the stock is up so much today. There are people that obviously see value in it and they are buying the shares because they see a breakup as being a catalyst.”

DuPont officials wouldn’t comment.

The company so far has successfully rebuffed attacks by Peltz, co-founder of Trian Fund Management, to push for changes he says would increase DuPont’s lagging stock price. One possibility could include splitting the company into pieces, with one unit housing the agriculture operations of DuPont Pioneer, based in Johnston, IA.

Agriculture is DuPont’s largest business, accounting for about a third of its $35 billion in sales last year.

Kullman narrowly defeated Peltz’s efforts to win board seats at DuPont in May, but the New York investor has retained his stake in the company and warned he could fight for further changes if things don’t improve.

A spokeswoman at Trian declined to comment on Kullman’s departure, but the firm’s chief investment officer, Ed Garden, said in an interview with CNBC Monday that “the DuPont story is far from over.”

Read the full story on DesMoinesRegister.com.

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