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Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →On July 23, 2002, DuPont announced an agreement to acquire ChemFirst in a cash transaction reported at about $408 million. The merger agreement set the consideration at $29.20 for each eligible ChemFirst share, subject to shareholder approval and regulatory clearances. The available contemporary records establish the proposed deal and its terms, not that it ultimately closed.
What DuPont agreed to pay
The merger agreement offered eligible ChemFirst shareholders $29.20 in cash per share, without interest. ChemFirst’s September 9, 2002 proxy statement said that amount was about 28% above ChemFirst’s $22.80 closing price on July 23, the last trading day before the agreement was signed. The approximately $408 million figure was the reported value of the overall cash transaction, not the per-share payment. (ChemFirst proxy statement, 2002; EDN, July 23, 2002)
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How the proposed merger was structured
DuPont planned to have its wholly owned subsidiary, Purple Acquisition Corporation, merge into ChemFirst. ChemFirst would survive the merger as a wholly owned DuPont subsidiary. The transaction required ChemFirst shareholder approval and regulatory clearances. The proxy, dated September 9, 2002, called shareholders to a special meeting on October 16.
At the time of the July announcement, the companies expected completion during the fourth quarter of 2002, subject to approvals. That was a forecast, not confirmation of a closing date. The cited announcement and proxy document the proposed transaction and shareholder process; they do not establish the final outcome. (ChemFirst proxy statement, 2002; EDN, July 23, 2002)
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What ChemFirst brought to DuPont
ChemFirst had two distinct businesses: electronic chemicals and materials used in semiconductor manufacturing, and specialty chemical intermediates, including products for polyurethane applications. The two lines served different markets and were expected to fit into different parts of DuPont.
| ChemFirst business | Market and capabilities | Planned DuPont fit |
|---|---|---|
| Electronic materials | Semiconductor fabrication materials, along with products, customer access and technical service capabilities. | DuPont Electronic Technologies, where DuPont said the business would expand its semiconductor fabrication materials presence. |
| Chemical intermediates | Specialty intermediates for polyurethane and other applications; the business operated as First Chemical Corp. | DuPont Chemical Solutions Enterprise. |
EDN reported that ChemFirst had $278 million in sales in 2001 and 480 employees at the time of the announcement. Chemical & Engineering News reported that 2001 sales were approximately 70% polyurethane intermediates and 30% electronic chemicals. These are historical figures from the contemporaneous coverage, not current company statistics. (EDN, July 23, 2002; Chemical & Engineering News, July 29, 2002)
Why DuPont pursued the acquisition
DuPont presented the electronic materials business as a way to broaden its access to semiconductor fabrication customers and add products and technical service capability. Dave Miller, then a DuPont vice president and general manager of DuPont Electronic Technologies, said: “It expands the DuPont presence in semiconductor fabrication materials and provides a platform for growth. We intend to become a leading supplier in that industry through new product offerings and technology. ChemFirst’s products, market access and technical service capability will allow us to accelerate this effort.” (EDN, July 23, 2002)
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Contemporary trade coverage described ChemFirst’s technical portfolio as including polyhydroxystyrene-based polymers for 248-nanometer photoresists, development of acrylic-based polymers for 193-nanometer photoresists, photoresist strippers and slurries used in chemical mechanical planarization. Those products complemented DuPont’s electronic materials platform. Chemical & Engineering News also reported DuPont’s claim that high-end photoresist markets were growing 13% annually; that was a company claim reported in 2002, not a current market estimate or an independently verified forecast. (Chemical & Engineering News, July 29, 2002)
The intermediates business supplied a separate rationale. Miller said the acquisition offered “a high-growth electronic technologies opportunity, while the chemical intermediates will add attractive earnings from day one.” That statement described DuPont’s expectations, not proof of later financial performance. (EDN, July 23, 2002)
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What ChemFirst shareholders were offered
Under the proposed terms, eligible shareholders were to receive $29.20 in cash for each share upon completion of the merger. The proxy set out the shareholder approval process and the board’s recommendation. Shareholders considering what the proposal meant financially could distinguish the contractual per-share amount from the reported aggregate deal value: the former was $29.20 per eligible share, while the latter was reported as approximately $408 million. (ChemFirst proxy statement, 2002)
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