(Reuters) – DuPont de Nemours Inc has agreed to buy engineering materials maker Rogers Corp for $5.2 billion, doubling down on efforts to fortify its presence in fast-growing markets such as electric vehicles, 5G and clean energy.
The company also plans to sell a substantial portion of its mobility & materials segment, as well as its stake in the DuPont Teijin Films joint venture, it said on Tuesday. Combined, these businesses represent about $4.2 billion in annual revenue.
The Rogers deal, which DuPont had been evaluating for about three years, will build on a $2.3 billion buyout of Laird Performance Materials in July and help bolster the company’s advanced electronic materials portfolio.
DuPont was looking at a couple of other targets, Chief Executive Officer Ed Breen told Reuters, adding that any deal would be to expand in the company’s core businesses. The company will also look to buy back shares with the excess cash, he said.
Rogers stock rose 32% in premarket trade, just shy of the offer of $277 per share. DuPont’s shares fell 1%.
DuPont also beat third-quarter revenue and profit estimates, as strong demand and pricing gains helped offset higher raw material costs.
The company posted sales of $4.3 billion and profit of $1.15 per share, compared with estimates for sales of $4.1 billion and profit of $1.12 per share, 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.
(Reporting by Arathy S Nair in Bengaluru; Editing by Sriraj Kalluvila)