DuPont to sell car paint unit to Carlyle for $4.9 billion

Thu Aug 30, 2012 9:37am EDT
 
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(Reuters) - DuPont Co (DD.N: Quote) struck a deal to sell its slow-growing car paint business to private equity firm Carlyle Group LP (CG.O: Quote) for $4.9 billion cash as it seeks to focus on higher-growth areas such as agriculture and nutrition.

The sale of DuPont Performance Coatings would remove the lowest-margin and slowest-growth business from the chemical company's portfolio, and allow DuPont to cut debt and make acquisitions in priority areas that also include advanced materials and biotechnology.

"This transaction is consistent with our ... long-term strategy of driving competitive advantages in agriculture and nutrition, advanced materials and biotechnology, which represent high-growth, high-margin opportunities," DuPont Chief Executive Ellen Kullman said in announcing the deal on Thursday.

"After a careful review, we have determined that DPC's full growth potential would be best realized outside DuPont and through the sale to Carlyle," Kullman said.

The sale caps a nearly eight-month-long auction of the car paint unit, which has 11,000 employees and is expected to generate revenues of more than $4 billion this year.

Washington, D.C.-based Carlyle outbid Apollo Global Management LLC (APO.N: Quote) and a consortium of KKR & Co LP (KKR.N: Quote) and Onex Corp OCX.TO, which also submitted final bids in July, people familiar with the matter previously told Reuters.

Reuters on Wednesday reported that DuPont was nearing a deal to sell the business to Carlyle this week.

DuPont's performance coatings business primarily sells to Maaco and other auto paint refinishers. Ford Motor Co (F.N: Quote) and General Motors Co (GM.N: Quote) are also key customers, although selling to so-called original equipment manufacturers is not as lucrative.

After the sale, expected to close in the 2013 first quarter subject to regulatory approvals, DuPont said it will still generate more than $3 billion through sales of advanced materials to the auto industry.   Continued...

 
A view of the Dupont logo on a sign at the Dupont Chestnut Run Plaza facility near Wilmington, Delaware, April 17, 2012. REUTERS/Tim Shaffer