Wilmington, Del.—DuPont has announced it is in exclusive negotiations with subsidiaries of Koch Industries of Wichita, Kan., regarding the possible sale of DuPont Textiles & Interiors (DTI). The company informed employees that Koch representatives would be visiting DTI sites as part of the due diligence process. This past spring, DuPont announced it was engaged in preliminary negotiations to sell DTI, but did not name Koch as the potential buyer ( FCNews, May 12/19). DTI, a subsidiary of DuPont, produces textile fibers for the flooring and apparel industries, such as Stainmaster and Antron. It was formed by its parent company in 2002, and has been operating as a wholly owned subsidiary of DuPont since February. A DuPont press release stated, given the ongoing nature of the discussions, the company “would not provide any additional in formation [on the negotiation] at this time.

There can be no assurance that the negotiations will result in an agreement being reached or, if an agreement is reached, of the terms, conditions or timing of any potential transaction. DuPont does not intend to make any further public announcement unless and until a definitive agreement has been signed or discussions have been terminated.” Many in the industry believe the Koch subsidiary DTI will be sold to is Houston-based, KoSa, which already has its feet wet in the flooring industry as it runs the old Hoechst Celanese polyester business. And, a release appearing on Koch’s Web site stated the company “believes acquiring the DTI businesses would complement the polyester businesses of Koch company, KoSa B.V. and its subsidiaries, which are already global leaders in polyester production. “By combining KoSa’s capabilities with DTI’s strong brands and leadership positions in nylon and spandex,” it continued, “the acquisition would create a diversified and integrated company well-positioned to compete in global fibers and resins markets.” “If the transaction comes to fruition, it has yet to be determined how we would interface with KoSa,” said Alan Wolk, vice president and general manager of DTI’s global flooring business.

The Koch release went on to state that the company sees “great potential value with this possible transaction: • DTI is highly innovative and customer focused, with outstanding research and development capabilities, a superb branding capability, and very capable commercial leaders; • Koch’s private status positions it to weather the cycles of the man-made fibers and resins business and respond quickly to market developments and to create superior value for customers; • Koch has a great deal of experience in businesses that are cyclical, highly competitive and becoming more mature, and combining the capabilities of DTI and KoSa would give the new company the scale and resources to effectively compete in these types of global markets; • DTI has well placed assets, strong manufacturing and marketing relationships, and high quality resources in the growing markets of Asia; • The new company would be one of the key suppliers to DuPont, one of the world’s leading industrial companies, and • There are expansion and new investment opportunities within and related to these businesses, to build on some of the most recognized and consumer-appreciated brands in the world.” The release also stated that the execution of a definitive agreement to purchase DTI is still subject to the completion of ongoing due diligence reviews and board approvals. The definitive agreement, once signed would be conditioned on regulatory approvals.