Investing.com – Dupont stock (NYSE:DD) plunged 6% in Tuesday’s premarket as the company announced a major recast of its operations, spending heavily to gain greater exposure to the electric vehicle and 5G industries.
The company said it will buy electronics-materials specialist Rogers Corporation (NYSE:ROG) for $5.2 billion. Rogers makes products for use in high-frequency circuit materials, ceramic substrates for power semiconductor devices, and high-performance foams which go into a variety of highly specialized end-markets, but a growing share of its business is with the EV sector and 5G telecommunications.
Rogers stock (NYSE:ROG) soared 30% in premarket trading.
To help fund the acquisition, DuPont is planning to sell a substantial part of its Mobility & Materials segment, which accounted for nearly a third of group sales in recent years. The Engineering Polymers and Performance Resins lines of business as well as the group's stake in the DuPont (NYSE:DD) Teijin Films joint venture are both candidates for disposal.
DuPont has three divisions -- Electronics & Industrials, Mobility & Materials, and Water & Protection.
The Mobility & Materials business brought $1.3 billion in net sales in the September quarter, up 30% on-year.
The E&I unit, which would be combined with Rogers, accounted for roughly 35% of the company’s $4.3 billion of net sales in the third quarter.
Rogers is expected to make $950 million in 2021 revenue. The transaction is expected to close in the second quarter of 2022, a DuPont release said.
The company declared its third-quarter earnings also today. Adjusted profit per share was $1.15. Both sales and profit were higher than estimates.
Dupont in its current shape is itself the consequence of a highly-expensive piece of corporate restructuring barely five years ago, when it merged with Dow Chemical (NYSE:DOW) before resuming trading in a heavily restructured form under its own name.