DuPont sells half its automotive business
DuPont is selling roughly half of its automotive business.
The company is selling its auto paint business, DuPont Performance Coatings, to Carlyle Group, a private equity firm in Washington, for $4.9 billion in cash. It will keep its other automotive operations.
The coatings unit employs 11,000 at 35 plants globally. It generated revenue of $4.28 billion last year, and is expected to generate revenue of at least $4 billion in 2012, DuPont and Carlyle said.
The sale is expected to close in the first quarter next year.
DuPont retains its DuPont Automotive unit headed by Chris Murphy. The suburban Detroit unit generates $3 billion from sales of nylon, plastics and other materials to automakers and suppliers, as well as auto refrigerants, tools and safety products to the aftermarket.
For DuPont, the transaction allows the Delaware company to refocus on higher-margin products, CEO Ellen Kullman said in a statement.
"The business continues to grow and deliver solid results," Kullman said. "After a careful review, however, we have determined that DPC's full growth potential would be best realized outside DuPont and through the sale to Carlyle."
DuPont has a century-old connection to the auto industry. Pierre DuPont stepped in as chairman of General Motors in 1915-28, taking control of the company from founder Billy Durant and installing legendary CEO Alfred Sloan. At one point, the DuPont clan owned 43 percent of GM.
Joe Campbell, a suburban Detroit plant manager for DuPont Performance Coatings, said the coatings unit expects to grow under Carlyle Group, which also owns Allison Transmission Holdings Inc. Carlyle bought the Indianapolis supplier from GM in 2007 for $5.4 billion.