DuPont Co. said activist investor Trian Fund Management’s plan to break up the 212-year-old chemical maker would cost at least $4 billion.
Upfront breakup expenses include taxes, separation costs as well as refinancing and reissuing debt, Wilmington, Delaware-based DuPont said in a presentation filed with regulators Monday. Creating a second set of corporate functions and reduced tax efficiency would cost an additional $1 billion a year, DuPont said.
Trian is seeking four DuPont board seats, part of a plan to eliminate what it says are as much as $4 billion in excess costs. Nelson Peltz, the New York-based fund’s chairman and chief executive officer and a nominee for one of the seats, has said the best way to reduce costs is by separating faster growing businesses such as agriculture from more cyclical units.
A breakup would curb growth by damaging the company’s research and development efforts, diminish global competitive advantages, reduce brand awareness and hurt market access, DuPont said in the filing.
Trian released a statement Monday in response to the presentation without addressing DuPont’s estimates of the breakup costs.
“Dupont is attempting to distract and mislead shareholders from the real issues at the company: Its consistently sub-par performance and management’s lack of confidence in the company’s future,” Anne Tarbell, a Trian spokeswoman, said in the statement.
DuPont’s board election is scheduled for May 13.