Summary
E. I. du Pont de Nemours and Company (DuPont) announced on June 7, 2001, a definitive agreement to sell its Pharmaceuticals Unit to Bristol-Myers Squibb Company for $7.8 billion in cash. This significant divestiture represents a strategic shift for DuPont, allowing it to focus on other core business areas while generating substantial capital. The company plans to utilize a portion of the proceeds to complete its existing $2.5 billion share buyback program and allocate the remainder towards debt reduction and strategic investments in growth opportunities. In conjunction with this sale, DuPont's Board of Directors has authorized a new $2 billion share buyback program, to commence after the completion of the current one. This dual approach of selling a non-core asset and aggressively returning capital to shareholders through buybacks is intended to enhance shareholder value. The transaction is anticipated to be accretive to earnings in 2002, with the specific impact on current year earnings per share contingent on the closing date and the buyback execution pace. DuPont will retain its interest in Cozaar/R//Hyzaar/R/, an antihypertensive drug developed with Merck.
Key Highlights
- 1DuPont to sell its Pharmaceuticals Unit to Bristol-Myers Squibb Company for $7.8 billion in cash.
- 2The sale of the Pharmaceuticals Unit is expected to close in the fourth quarter of 2001, subject to government approvals.
- 3Proceeds from the sale will be used for debt reduction and investment in growth opportunities aligned with DuPont's strategic direction.
- 4DuPont has authorized a new $2 billion share buyback program, to begin after the completion of its existing $2.5 billion program.
- 5The transaction is expected to be accretive to earnings in 2002.
- 6DuPont will retain its interest in the antihypertensive drug Cozaar/R//Hyzaar/R/, developed with Merck.