Historic DuPont Building slated for redevelopment - C&EN Global

For more than a century, an early 20th-century high-rise building in Wilmington, Del., served as the headquarters of the iconic chemical firm DuPont. ...
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AkzoNobel to exit chemicals within 12 months CEO calls divestment plan superior to takeover offer from rival PPG

CREDIT: GETTY IMAGES (MCGARRY); UNITED PHOTOS/REUTERS/NEWSCOM (BÜCHNER); HOTEL DU PONT (HOTEL)

AkzoNobel intends to divest its chemicals business within the next 12 months. The move will return more money to shareholders than would accepting an unsolicited takeover offer from PPG Industries, AkzoNobel’s CEO Ton Büchner told analysts at a London briefing on April 19. AkzoNobel said it will either float shares of its chemicals business on the stock market or sell the business as a whole to another company. Analysts estimate it will fetch between $8 billion and $12 billion. The divestment will create a chemicals business with annual sales of $5.0 billion, pretax profits of $1.0 billion, and about 9,000 employees. The business has five key units: surfactants, ethylene oxide and derivatives, polymer chemicals, chlorine-based chemicals, and bleaching chemicals.

The sale will leave AkzoNobel as a paints and coatings company with annual sales of $10.0 billion, pretax profits of $1.2 billion, and about 37,000 employees. A sale or share flotation will ensure superior value for shareholders and lower risks such as competition issues than if the company accepted PPG’s takeover offer, Büchner said. PPG offered to buy AkzoNobel for more than $26 billion. AkzoNobel’s new plan was met with a blunt response from Wiktor Sliwinski, a portfolio manager for Elliott Advisors, a hedge fund management company that owns shares in AkzoNobel and pushed for the PPG deal. AkzoNobel failed to provide an objective and fair comparison of the chemicals divestment plan with PPG’s proposed acquisition, Sliwinski said. The analyst meeting came two days after

McGarry

Büchner

PPG CEO Michael H. McGarry published an open letter to AkzoNobel’s shareholders asserting that his offer to buy the Dutch firm “is the compelling opportunity.” In the letter, McGarry claimed that only since PPG’s approach has AkzoNobel developed a new strategic plan. In contrast, Büchner said he has been planning to divide AkzoNobel for the past few years. Doing it now is appropriate, he added, because pension obligations were recently “de-risked” and both parts of the firm are healthy. He predicted that the paints and coatings business will increase its pretax profit margin from 10.6% today to about 15% in 2020. The chemicals business margin should rise from 11.5% today to about 16% in 2020. Under AkzoNobel’s divestment plan, shareholders will receive a $1.6 billion boost to dividends this year and a promise to maintain higher future dividends.—ALEX SCOTT

INVESTMENT

Historic DuPont Building slated for redevelopment Chemours will occupy renewed space, and the turnof-the-century Hotel du Pont will be preserved For more than a century, an early 20th-century high-rise building in Wilmington, Del., served as the headquarters of the iconic chemical firm DuPont. Now the DuPont Building and its Hotel du Pont have been sold to a real estate developer that plans to modernize them and turn them into a mixed office, residential, hotel, and retail complex. DuPont, which plans to merge with Dow Chemical later this year, bid adieu to the city of Wilmington in 2015, moving to nearby Chestnut Run Plaza. It handed over ownership of the 13-story hotel and DuPont Building to its fluorochemicals spin-off, Chemours. DuPont continued to manage the hotel until February, when it sold the management business to the Buccini/Pollin

Group, a real estate developer. The real estate group has now completed the purchase of the DuPont property from Chemours. It plans to refurbish 24,000 m2 of office space and lease it to back to Chemours. The chemical company will continue to use the DuPont Building as its headquarters. Buccini/Pollin plans to lease an additional 5,500 m2 of multitenant office space in the building. It also expects to carve out 180 luxury residential units from the DuPont Building, which dates to 1908. The group promises to preserve the 1913 Italian Renaissance-style Hotel du Pont, including the paneled, two-and-a-half-story-high Green Room restaurant.

The Green Room in the Hotel du Pont will be preserved.

All told, Buccini/Pollin says it will spend $175 million on the redevelopment, which will also include 3,700 m2 of ground-level retail and dining space. Maintaining Chemours’s headquarters in the DuPont Building acknowledges its legacy, CEO Mark Vergnano says. The refurbished offices will also mark Chemours’s transformation into a “world-class chemistry company” in a “world-class work environment,” he says.—MARC REISCH APRIL 24, 2017 | CEN.ACS.ORG | C&EN

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