U.S. chemicals maker DuPont said the termination of the deal was agreed with Rogers (which makes engineering materials) as they have been unable to obtain timely clearance from all the required regulators. They said in September that they had received all regulatory approvals for the deal except from China.
While it was not specified which “required regulators” hadn’t cleared the transaction, DuPont previously identified China’s State Administration for Market Regulation, SAMR, as the last remaining hurdle for deal approval.
The collapse of the deal raises uncertainty over the restructuring of DuPont, which has been tweaking its portfolio to focus on high-margin operations and fast-growing industries such as electric vehicles, 5G and clean energy.
The scuttling comes as mounting tensions between the US and China spill into industry as both governments vie for preeminence in key sectors such as semiconductors, advanced batteries for electric cars and artificial intelligence.
China has been wielding its power over the mergers of foreign companies with increasing force in recent years. In 2018, US-based Qualcomm Inc. scrapped a $44 billion bid for Dutch chipmaker NXP Semiconductors NV after Chinese regulators failed to approve what would have been the largest-ever deal in the chip industry.
Last year, Blackstone Group Inc.’s $3 billion takeover of Soho China Ltd. collapsed a month after the companies said SAMR had formally accepted the deal for review.
China sales accounted for more than a third of Rogers’ 2021 revenue, while nearly half of DuPont’s sales came from the broader the Asia-Pacific region, according to data compiled by Bloomberg.
Shares of engineering materials maker Rogers plunged 43% in extended trading on Tuesday, while those of DuPont rose about 6%.