DuPont calls off $5B Rogers deal
WILMINGTON — After months of trying to get approval from Chinese regulators on a $5.2 billion acquisition of engineered materials and components company Rogers Corp., DuPont announced Tuesday night that it was terminating the deal.
Saying only that “the companies have been unable to obtain timely clearance from all the required regulators,” DuPont will pay a termination fee of $162.5 million rather than continuing to try to get approval. In September, the companies announced that they had received all approvals for the deal except for in China — and the scuttled deal will reportedly be one of the largest due to Chinese authorities in recent years. The deal had originally been expected to close in the second quarter of 2022, but has dragged on through the summer and into the fall.
“Rogers is currently evaluating all options to determine the best path forward in response to DuPont’s notice,” the Arizona-based Rogers said in a Wednesday morning statement following after-hours trading pushed its share price down about 40%. “Rogers remains an exceptional company, and the team continues to execute on our successful growth strategy. Our strong competitive position innovating across fast-growing markets, including EV/HEV, is underscored by continuing design wins, broad customer enthusiasm and a robust pipeline of opportunities.”
The Wilmington-based DuPont has not provided a comment, but is scheduled to hold its third quarter earnings report conference call on Tuesday, Nov. 8.
DuPont had eyed Rogers Corp. as part of a larger strategy to realign the advanced materials company toward growth industries like electric vehicles, 5G telecommunications and clean energy.
A publicly traded company based in Arizona, Rogers has a global workforce of more than 3,500 employees at 14 manufacturing sites in North America, Europe, and Asia, including a Delaware site in Bear. It has expected revenues of approximately $950 million this year, officials reported.
Rogers designs, develops, manufactures and sells high-performance engineered materials and components through its Advanced Electronics Solutions (AES) and Elastomeric Material Solutions (EMS) segments. It makes “high-frequency circuit materials, ceramic substrates for power semiconductor devices, and high-performance foams which go into a variety of highly specialized end-markets where the company has strong, enduring customer relationships,” according to DuPont’s announcement.
“With industry-leading positions in each of its product categories, a proven history of application engineering excellence and deep customer relationships, Rogers is highly complementary to and aligned strategically with our existing Electronics & Industrial business and is expected to deliver compelling returns over the near and long-term,” DuPont CEO Ed Breen said in a statement announcing the sale.
The nixed deal comes on the same day as DuPont continued to shed its own divisions, however, closing the sale of the majority of its Mobility & Materials segment to Celanese Corp. Proceeds of that sale was intended to repay financing lined up for the Rogers’ acquisition and potentially help pay for additional future acquisitions, the company reported.
Breen said DuPont sought to focus on “high-growth, high-value opportunities in sectors with steady long-term secular growth trends where our global innovation leadership enables a competitive advantage,” with a portfolio centered on electronics, water, protection, industrial technologies and next generation automotive.
“We are committed to investing in each of these pillars organically and through strategic acquisitions to maximize our capabilities in areas that enable our customers to grow by delivering next generation technologies and sustainable high value-added solutions,” he added last year.
DuPont’s shares were up about 3% in early market trading Wednesday following the news of the end of the Rogers deal, a sign that some investors had felt the company was overpaying for Rogers at $277 a share, appreciating the company by about 33% on its market cap a year ago. One investment analyst reported in September that DuPont executives planned to focus on stock buybacks, which would boost share value, if the Rogers deal fell apart.