DuPont sells trichlorosilanes, Hemlock stake
DuPont says it has divested its trichlorosilane (TCS) business as well as its stake in the Hemlock Semiconductor joint venture to Hemlock for $725 million. The deal has received regulatory approval and was closed at signing.
Hemlock’s ownership structure before the deal was 40.25% Corning, 40.25% DuPont and 19.5% Shin-Etsu. Hemlock tells CW that Corning’s share is now 80.5% and Shin-Etsu’s stake remains unchanged.
Based in Midland, Michigan, the TCS business supplies the key raw material to Hemlock Semiconductor (Saginaw County, Michigan) to use as raw material to manufacture high-purity polysilicon and other industrial chemicals for the semiconductor and solar panel industries. Corning says Hemlock’s sales are backed by long-term take-or-pay customer contracts through this decade, and that the acquisition of TCS provides substantial cost reduction and increased cost certainty.
DuPont received pre-tax cash proceeds of $550 million at closing and expects to receive additional pre-tax cash consideration of $175 million over the next 36 months from the settlement of an existing supply agreement dispute with Hemlock.
“This transaction is consistent with our commitment to refine our portfolio and sharpen our focus on growth opportunities where DuPont’s unique innovation capabilities can create greater shareholder value,” says Ed Breen, DuPont executive chairman and CEO. “We have a defined strategy of active portfolio management to further align the company’s resources to deliver higher margins and returns, aligned with our disciplined approach to capital allocation.”