Divestitures

The various restructures of the industry are all planned to address these major issues. Wide-area planning, while undefined, may solve certain issues resulting from the unknown parameters. Divestiture of the industiy into generation, transmission, and distribution companies will strengthen emphasis on the facilities involved. Many of these new structures will move the industiy toward full competition however, coordination of their activities could become more difficult. 

The sale of Elk Hills was the nation s largest public divestiture. In 1996, Congress decided that the properties no longer served the national defense purposes as envisioned in the early 1900s, and authorized steps towards divestment or privatization. 

Typically, revenue streams from such divestitures come in two forms ... 

The development of new products for new markets (e.g., electronic chemicals for a fine-chemical company thus far dealing only with life sciences) is the task of corporate development. The latter is a staff function reporting to the CEO. It deals with activities outside the authority of the operating divisions. Apart from new products for new markets, it also looks after joint ventures, mergers and acquisitions, and divestitures. 

While these divestitures were taking place, traditional fine chemicals manufacturers were able to enjoy new contracts for the synthesis of active ingredients from companies involved in crop protection products and pharmaceuticals. Many European companies were the beneficiaries of the new trend. In Switzerland the leader was Lonza, which became independent in 1999 when its mother company, Alu Suisse, merged with the Canadian aluminum manufacturer Alcan. Other Swiss firms—such as Siegfried AG, EMS-Dottikon, Cilag, and Orgamol, Rohner, now part of Dynamit Nobel—took advantage of these developments. Clariant entered the field on a big scale in 2000 with its acquisition of BTP. 

A letter from the chief executive officer (CEO) describing the past year s operations, significant acquisitions, divestitures and restructuring, and plans for the short and long term ... 

The cash flow from investing activities section lists the cash spent on acquiring fixed assets such as property, plant, and equipment, less any revenues from sale of fixed assets. It also lists acquisitions or divestitures of subsidiary businesses. 

Next came acquisitions, funded in part by the divestitures, that reinforced the learning base in the paths that the firm had long followed. In films and fibers it purchased Exxon s carbon fiber business in 1984, Exxon s film composites activities in 1985, and Hercules s olefin fiber carpets in 1989. Later, in 1992, it traded its acrylic assets to ICI for the latter s nylon business, plus 41 million. In paints and finishes Du Pont obtained Ford s North American automotive paint division in 1986, followed by a joint venture with ICI to expand the same market in Europe, and one with Kami Paint to do so in Japan and East Asia. In agricultural chemicals it acquired Shell s agricultural chemicals division in 1986, and later in 1992 collaborated with Shell to develop specialized insecticides. For Du Pont, sustaining its technical and functional capabilities in long-established paths in which it was a competitive leader remained a basic strategy. ... 

---