Chemical giant DuPont Co. will sell its pharmaceuticals business to Bristol-Myers Squibb Co. for $7.8 billion in cash, freeing up money to repay debt, invest in new opportunities and buy back its own stock.
DuPont has planned to sell or spin off its drug business for months in order to focus on its core chemical operations. Charles Holliday, the company's chief executive officer, has said that the company's future lies in making specialized chemicals designed for specific applications, including genetically modified food.
The sale comes as DuPont struggles with an economic downturn that has forced it to eliminate thousands of jobs.
Bristol-Myers is buying the drug business as part of its effort to double sales and earnings by 2005.
"This acquisition is an important step in aggressively implementing our growth strategy, which envisions expanding our medicines business through acquisitions, joint ventures, licensing and co-promotion agreements," said Peter Dolan, chief executive officer of Bristol-Myers.
On Thursday, shares of DuPont rose 49 cents to close at $46.83. Bristol-Myers stock rose 8 cents to $56.68.