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DuPont CEO: Discussing Agriculture Business With Rivals

dupontDuPont is in talks with rivals about the company’s agriculture business, said Edward Breen the interim CEO on Tuesday. This comes less than one week after Dow Chemical announced it would review it seeds and farm chemicals unit.

Falling prices of crops and rising output of fertilizer have triggered talks of possible consolidation amongst companies with a focus on farming.

DuPont has been talked about as a possible buyer of the farm unit of Dow, but some questioned if the business is in the positions to do so.

CEO Breen took the top spot at DuPont earlier in October after an abrupt resignation by Ellen Kullman.

Asked on a call following the posting of quarterly earnings, if DuPont was interested in selling its own farm unit, Breen said we are going to do what is best for shareholders to create better value for them.

Breen would not commit to a purchase or sale of the unit, which represented over 22% of the total revenue at DuPont during the quarter ending September 30.

One industry analyst said his company would be shocked if the management team at DuPont did not at least give the agriculture business at Dow a look, but such a large business as Dow has, rarely changes hands.

Trian Fund Management’s Nelson Peltz lost a proxy battle in may for board seats at DuPont. Peltz said that DuPont could save between $2 million and $4 million in costs annually through separating its materials businesses, which are volatile, from its more stable businesses.

DuPont, said Breen, would take a new long look at its capital allocation and cost structure strategy,

The seed and chemical producer is targeting close to $1.6 billion of annual savings by the start of 2017.

Cost cuts resulted in 10 cents of the 13 cents of the operating earnings for DuPont during the third quarter, which beat analyst’s estimates of 10 cents.

Sales were down 17.5% to end the quarter at $4.87 billion, which missed estimates by analysts of just over $5.3 billion.

DuPont is expecting sales for full-year 2015 to drop by between 11% and 12%, with sales dropping in five of the six overall units the company has during its ongoing quarter.

The company receives close to 60% of its overall sales internationally and has seen a strong U.S. dollar eat away 53 cents a share this year from earnings.

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