(Reuters) - DuPont DD.N’s interim Chief Executive Edward Breen will keep his job permanently, setting the stage for the executive best known for the turnaround and breakup of Tyco International Plc TYC.N to complete a wider overhaul of the chemicals and seed producer.
Breen’s appointment after less than a year with DuPont was announced on Monday and follows the October resignation of his predecessor, company veteran Ellen Kullman, and intense pressure for change from activist shareholder Nelson Peltz.
“Breen’s appointment will likely be seen as a sign that DuPont’s board of directors is considering more radical steps than it did prior to Ellen Kullman’s departure,” said SunTrust Robinson Humphrey analyst James Sheehan.
Unlike Kullman, who was with DuPont for nearly three decades and had been CEO since 2009, Breen is a newcomer. As Tyco’s CEO from 2002 to 2012, he split into six companies the sprawling conglomerate that was beset by scandal and strategic flipflops.
Analysts say Peltz and other investors are likely to welcome Breen’s appointment.
Peltz’s office was not immediately available for comment.
As interim CEO, Breen had already started planning changes at DuPont. The company said last week it would consolidate some businesses within two units - one that makes nylon and polyester and another that makes materials such as Kevlar, a synthetic fiber used in body armor.
Breen has also said DuPont is in talks with rivals about its agriculture business. Media reports have predicted a possible deal with either Syngenta AG SYNN.VX or Dow Chemical Co DOW.N.
DuPont, which has faced sliding sales for nearly two years, has been looking to save about $1.6 billion annually by 2017. Breen has said he will revisit the company’s budget allocation.
“We expect further cost cutting ... DuPont might consider $2 billion of additional cost takeout, bringing it closer in line with Peltz’s vision for the company,” Sheehan said.
Under Kullman, DuPont successfully fended off an attempt by Peltz’s Trian Fund Management to land board seats this year.
But Peltz is considering a second attempt to get board seats, people familiar with his thinking told Reuters a day after Kullman’s departure.
Peltz has urged DuPont, officially known as E I du Pont de Nemours and Co, to separate its volatile materials businesses from more stable areas.
DuPont shares, which hit a 17-year peak in March, had dropped by nearly a third from that level just before Kullman’s exit, but have made up some of their losses since.
The stock was up slightly at $66.27 in early afternoon trading on Monday.
Reporting by Shubhankar Chakravorty in Bengaluru; Editing by Sayantani Ghosh, Christian Plumb and Frances Kerry