DuPont to sell performance coatings unit to Carlyle

US investment group Carlyle has agreed to buy the performance coatings business of DuPont for $4.9 billion in cash, the companies said on Thursday.

The transaction is expected to close in the first quarter 2013, subject to customary closing conditions and regulatory approvals.

DuPont Performance Coatings is a global supplier of vehicle and industrial coating systems with 2012 expected sales of more than $4 billion and more than 11,000 employees.

“DuPont Performance Coatings is a leader in the automotive and industrial coatings sectors with world-class products and customer service,” said DuPont CEO Ellen Kullman. “The business continues to grow and deliver solid results.

“After a careful review, however, we have determined that DPC’s full growth potential would be best realized outside DuPont and through the sale to Carlyle,” she added.

Gregor Böhm, managing director and co-head of Carlyle’s Europe buyout team, called the performance coatings segment a “technology innovator”.

“We look forward to building on its strong market presence to accelerate growth in emerging markets, particularly in China and Brazil,” said Böhm.

Kullman stressed that DuPont remains committed to serving the automotive industry. Following the closing of this transaction, DuPont will generate more than $3 billion in sales of advanced materials to the auto industry, she said.

“We will continue to work closely with automotive customers to apply our science-powered innovations related to light weighting of vehicles, revolutionary and environmentally friendly refrigerants, biobased seat fabrics and headliners, and next-generation biofuels,” Kullman said.

As part of the transaction, Carlyle will assume $250 million of DuPont’s unfunded pension liabilities.

Carlyle’s industrial and automotive investments include Allison Transmission, Hertz and PQ Corp., as well as recent commitments to invest in Hamilton Sundstrand Industrial, Sunoco’s Philadelphia refinery and regional rail freight operator Genesee & Wyoming.

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