Invista Acquisition Update

Wilmington, DE, Nov. 18--The DuPont Co. said Monday it has agreed to sell its nylon, polyester and Lycra business to Koch Industries Inc. for $4.4 billion, ending a nearly two-year effort to shed a unit that made DuPont famous but which the company said limited its prospects for increasing profits, according to the News-Journal. In a conference call with reporters, chief executive Charles O. Holliday Jr. said, "this is a bittersweet milestone for us," because DuPont invented the synthetic fibers industry. The company transformed everyday life by making possible cheap, durable versions of products such as stockings and toothbrushes that were once considered luxury items. Monday's announcement leaves both Invista and DuPont employees uncertain of their long-term future. Invista employs 1,100 people in Delaware, about 600 of whom work at the nylon plant in Seaford. "Nearly all or essentially all current Invista employees will be offered employment in the new Invista," Koch spokeswoman Mary Beth Jarvis said. However, she said it was "too early to tell" how the agreement might later affect Invista's 18,000 employees and 50 sites worldwide. A DuPont spokesman said the two companies have not yet decided whether Invista's headquarters will remain in Wilmington. Some analysts said DuPont employees may be even more vulnerable to job losses. Once the sale is complete, the company will employ 61,000 worldwide and 8,800 in Delaware. "Don't be surprised if there's more plant closings and more job reductions," said Gene Pisasale, senior investment officer with Wilmington Trust Co., which owns about 30.5 million shares, making it DuPont's third-largest shareholder. Invista accounted for $6.3 billion of DuPont's $24.1 billion in sales last year. Its sale is the latest step in the 201-year-old Wilmington-based company's attempt to transform itself into a life sciences company, emphasizing products such as electronic displays and genetically modified crops. DuPont spun off the Conoco Oil Co. in 1998 and 1999, and sold its pharmaceuticals unit in 2001. The sale of Invista, which is subject to regulatory approval, is expected to close in the first half of next year. It will leave DuPont with annual sales of about $20 billion. "This is not only the launch of Invista, it's the relaunch of DuPont," Holliday said. In the companies' joint release Monday, Koch chief executive Charles G. Koch said his company plans to combine its own commodity expertise with Invista's products and brand names, which include Lycra stretch fabric and Stainmaster carpet. Seaford plant manager Brenda Wilson said that because it is privately held, Koch may be more inclined to invest in Invista plants and facilities because it faces less pressure to satisfy Wall Street. Carl Goodman, president of the International Brotherhood of DuPont Workers union, said Invista employees have mixed feelings about the sale. "I think there's a positive, upbeat feeling from the work force that it's finally out, and they're waiting to see whether Koch is a better employer," he said. "Some aren't thrilled about working 25 years for DuPont and starting over with a company they know nothing about." Goodman and other union executives said the feeling is especially acute in Invista locales such as Seaford and Waynesboro, VA, which have some of the largest payrolls and oldest work sites. Invista spokeswoman Linda R. Morin said it is too soon to say what might happen to as many as 350 contract workers who work at the Seaford plant depending on construction and maintenance needs. Holliday said in the companies' joint release that DuPont "shortly will outline actions it will take to ensure competitiveness in global markets and achieve its growth objectives. "We won't comment on any job cuts," Holliday said in the conference call with reporters. Earlier in the day, he told analysts that DuPont's operations will have to reflect its reduced revenue after the sale of Invista is complete.

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