DU PONT TO BREAK FINAL G. M. TIES; 47‐Year‐Old Link Will End With a Last Distribution of 23 Million Shares (Published 1964) (2024)

The ties between E. I. du Pont de Nemours & Co., Inc., and the General Motors Corporation that go back 47 years will soon be finally cut.

Directors of du Pont authorized yesterday the distribution of the remaining 23 million General Motors shares held by the company to du Pont stockholders on Jan. 4, 1965. This will complete the divestiture of all du Pont's G. M. holdings as ordered in 1962 by a Federal Court as the climax in a prolonged and often bitter antitrust case.

Du Pont yesterday also declared a yearend cash dividend of $2.75 a common share, payable Dec. 14 to holders of record of Nov. 24. That action brought total dividend payments for 1964 to $7.25 a share, compared with $7.75 a share in 1963.

The reason for the lower dividend payments by du Pont this year lies in the diminishing total of its General Motors stock from which it has received major dividends over the years.

The latest and final will be on the basis of one‐half share of G. M. stock for each share of du Pont common stock held as of Nov. 24, 1964.

The court order had required that du Pont divest itself of all G. M. stock not later than next Feb. 28.

Recently, du Pont reported that in the first nine months of this year its earnings amounted to $7.19 a year. That represented $5.71 in operating profit, $1.14 in General Motors dividends and 34 cents from the sale of some G. M. stock. By contrast, in the corresponding period of 1963, du Pont's earnings included $5.18 from operating activities and $1.60 from General Motors dividends.

Before the 1962 court order, du Pont owned 63 million General Motors shares. The divestiture has since followed in three steps.

Du Pont stockholders received half a share of G. M. common stock for each share of du Pont common they held in the initial distribution made in July, 1962. They then received 36‐100ths of a share of G. M. stock for each share of du Pont common in the second distribution made last January.

The first distribution involved about 23 million shares General Motors stock and the second amounted to nearly 17 million shares.

Du Pont's interest in General Motors dates back to 1917 when the chemical company began to acquire a sizable foothold in the then‐fledgling auto company. By the time the court decree was issued in 1962 ordering divesture, du Pont held a 23 per cent interest in G.M., with a value then of more than $1.2 billion.

The antitrust suit involving du Pont's holdings in General Motors extended for 13 years. It probably still holds the title as the country's lonngest‐run legal drama.

The Justice Department first brought suit on the ground that since du Pont supplies General Motors with many of its principal products — such as paints and lacquers—the stock ownership violated section 7 of the Clayton Act. This prohibits stock acquisitions whose ef‐ fect “may be substantially to lessen competition or to tend to create a monopoly.”

A Federal Court dismissed the Government's complaint, but the Supreme Court dis agreed. It held in 1957, by a vote of 6 to 4, that du Pont's ownership of the G.M. stock did indeed violate Section 7.

There followed Iong court proceedings to decide just how the stock divesture should be effected. Fear was expressed that “dumping” such a huge amount of stock on the open market would not only depress the price of General Motors shares unduly, but that it would also upset the entire stock market because of the leading role G.M. stock plays in daily trading.

Finally, the divestiture plan that is now nearing completion was agreed upon. The effect on the market has been barely discernible, since there been, in effect, no dumping. Instead, the G.M. stock simply has been passed on to the more than 223,000 common du Pont shareholders in three widely spaced stages over 2½ years.

Wall Street sources say that after the two previous “passons” of du Pont's holdings in General Motors, there was hardly a ripple of effect on the market. Apparently, most of recipient du Pont stockholders held on to their G.M. shares as a prime investment. It was then—and is now — one of the stock market's bluest of all “blue chips.”

Christiana Securities Directors of the Christiana Securities Company voted yesterday a dividend of $3.05 a share payable Dec. 14 to stockholders of record of Nov. 24. The December payment last year was $3.55 a share.

In all this year, the company will pay a total of $7.25 a share, compared with $7.75 last year.

Christiana is a holding company whose main investment in the stock of E. I. du Pont de Nemours & Co. Although there are 9,000 common stockholdrrs, the principal stockholders are members and associates of the du Pont family.