In one of the most significant changes in its 201-year history, E.I. d…

In one of the most significant changes in its 201-year history, E.I. du Pont de Nemours & Co. agreed to sell its textiles unit to Koch Industries Inc. for $4.4-billion (U.S.) in cash. The sale allows du Pont to focus on making chemicals for faster-growing industries. The sale of Invista Inc. —which includes du Pont’s nylon, polyester and Lycra fibre businesses —comes amid a steep decline in the U.S. textile and apparel industries, largely due to foreign competition. The sale will reduce du Pont’s dependence on high-cost raw materials such as natural gas and oil, and signals the company’s intent on making chemicals for the biotechnology and electronics industries —among them, for crop protection, food additives and electronic displays. Charles Holliday Jr., du Pont’s chairman and chief executive officer, who is coming under increasing pressure to improve the company’s growth, promised “an unwavering effort.” Analysts had initially forecast that the textiles unit would fetch $5-billion, but they lowered the figure to closer to $4-billion after du Pont, based on Wilmington, Del., identified closely held Koch as a possible buyer in August. Du Pont said it expects the sale to be neutral to positive to earnings. Du Pont invented nylon in the 1930’s and became a leader in developing new kinds of fibres, including Stainmaster carpet and Lycra-brand spandex, which is used in apparel from shoes to swimsuits to men’s shirts. The textiles unit had $6.3-billion in revenue in 2002, 18,000 employees and interests in 50 manufacturing sites around the world. While Invista generated about one-fourth of du Pont’s $24-billion in annual revenue, it was the company’s least profitable unit last year, resulting in job cuts and plant closings. Du Pont has struggled in recent quarters amid one of the worst downturns in chemical industry history, and some of its recent research and development initiatives, such as organic light-emitting diode, or OLED, have so far trailed the competition. OLED displays are generating enthusiasm because of their potential as thinner, brighter, more-durable screens for consumer electronics. Analysts said the Invista sale should help the second-largest U.S. chemical maker become a more nimble chemical manufacturer, with little debt and a higher potential for growth. The deal, said Frank Mitsch, managing director at Fulcrum Global Partners, “is a solid positive for the du Pont transformation.” The sale, which is expected to close in the first half of next year, subject to regulatory approval, also gives Koch a different outlet for its oil and natural gas, key ingredients in synthetic fibres, and solidifies the company’s polyester-fibre business. Koch, Wichita, Kan., energy and chemicals giant, also noted that because it is private, it is better able to “weather the cycles” of the textile business. In 4 p.m. New York Stock Exchange composite trading, du Pont shares were down 46 cents, or 1.1 per cent, at $39.73.

In one of the most significant changes in its 201-year history, E.I. d…

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