(Bloomberg) -- DuPont de Nemours Inc. plans to break up — again.

The company will separate its electronics and water units through tax-free transactions, forming a trio of publicly traded businesses in a process expected to be completed within the next two years. That’ll leave the remaining company focused more narrowly on industries such as biopharma and medical devices, with products including Tyvek and Kevlar.

The plan, revealed late Wednesday, adds to the growing list of industrial conglomerates seeking to boost returns by breaking into smaller, more focused businesses. It also represents a return to the well-worn playbook of Chief Executive Officer Ed Breen, who has overseen hundreds of billions of dollars of dealmaking, including multiple corporate breakups, in his career. DuPont itself has already spun out major business lines since its merger with Dow Chemical about a decade ago.

Many traditional industrial conglomerates are finding fewer benefits from synergies such as pooled fixed costs, said Barry Cross, a professor and assistant dean at the Queen’s University Smith School of Business. Corporate icons such as Johnson & Johnson, United Technologies, Danaher Corp. and General Electric Co. each have broken up in recent years in bids to create additional value for shareholders.

“They are loose collections of parts that don’t always make sense to keep together anymore,” said Cross, who once worked at DuPont but has no current connection with the company. Splitting up “can provide more value with focused leadership teams and fewer distractions from brother and sister units.”

DuPont’s shares gained 1.6% at 9:47 a.m. Thursday in New York. The stock had trailed the broader market this year, rising just 2.1% in 2024 through Wednesday’s close.

‘Pretty Darn Interesting’

“DuPont has struggled to garner much attention or respect from the market” with its current conglomerate makeup, Scott Davis, an analyst with Melius Research, said in a note. “These assets together perhaps didn’t play well together, but separately they look pretty darn interesting.”

Once the latest split is complete, the remaining company will be the largest piece, responsible for about $6.6 billion of DuPont’s 2023 sales. The electronics business to be spun off had revenue of $4 billion last year while the water unit accounted for $1.5 billion, according to DuPont.

Splitting apart will give each new company “greater flexibility to pursue their own focused growth strategies, including portfolio enhancing M&A,” Breen said in a statement.

The CEO, who returned to the role in 2020, will step down June 1, the company said in a statement. Breen will retain the role of executive chairman of the remaining company while Chief Financial Officer Lori Koch assumes the CEO post.

Breen earlier engineered multiple breakups while CEO of Tyco International: a 2007 deal that created TE Connectivity and Covidien, and a later one to divide the remaining company into three businesses. DuPont, too, has had plenty of portfolio moves, including spinning out Chemours Co. in 2015. More recently, DuPont has been exploring divestitures and last year agreed to sell a controlling stake in Delrin for $1.8 billion. 

Read More: DuPont’s $200 Billion M&A Man Drives Fees for Evercore, Goldman

Before DuPont, GE was the latest example of a blue chip industrial company seeking to create value by breaking up. The manufacturing giant spun off its energy-related businesses in April after the early 2023 separation of its health-care unit. Shares of GE, which is now principally a maker of jet engines, have soared roughly 58% this year through Wednesday’s close.

DuPont expects to complete the separations within 18 to 24 months, subject to shareholder vote and regulatory approvals. The company on Wednesday also reaffirmed its second-quarter outlook and full-year financial guidance.

Centerview Partners LLC and Goldman Sachs are serving as DuPont’s financial advisers, while Skadden Arps Slate Meagher & Flom LLP is its legal counsel.

(Updates with share trading in sixth paragraph)

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