DuPont Inc (DD.N) on Tuesday agreed to buy engineering materials maker Rogers Corp (ROG.N) for $5.2 billion, its biggest deal since splitting from DowDuPont, to supply to fast-growing industries such as electric vehicles, 5G and clean energy.
Chief Executive Officer Ed Breen, a well-known deal maker, has been building out DuPont’s high-margin businesses such as electronics and water solutions. The company in July snapped up Laird Performance Materials for $2.3 billion after earlier divesting its nutrition & biosciences unit.
On Tuesday, the company announced plans to sell a substantial portion of its more cyclical mobility & materials unit, including its stake in the DuPont Teijin Films joint venture.
DuPont is looking at a couple of other targets, Breen told Reuters, adding that any deal would be to expand in the company’s core businesses.
Breen, who has previously headed Tyco International, Motorola and General Instrument, is credited with being instrumental in the merger of Dow and DuPont and the spilt of the chemicals conglomerate into three companies later. DuPont then emerged as an industrial solutions-focused business.
Rogers stock was up 30% in morning trade, just shy of the offer of $277 per share. DuPont’s shares gained 5%, reversing course from premarket trade.
DuPont also beat third-quarter estimates, as strong demand and pricing gains helped offset higher raw material costs.
Sales of $4.3 billion topped estimates of $4.1 billion, while profit of $1.15 per share beat expectations of $1.12, according to Refinitiv IBES data.
However, DuPont cut its full-year sales and profit forecasts, after having raised them twice so far, citing slowing orders in automotive markets due to a global chip shortage.
Breen said he expects the chip shortage to “persist well into 2022, though may be not at the same level as now,” adding he expects it to ease only when next capacity comes online, expected through next year.