DuPont takes welcome M&A break

Rogers

02/11/2022 16:14

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
       NEW YORK, Nov 2 (Reuters Breakingviews) - The seemingly
eternal makeover at DuPont de Nemours  DD.N  has been forced
into a welcome pause. The chemicals giant just scrapped its $5.2
billion acquisition of engineered materials manufacturer Rogers
 ROG.N  after failing to secure clearance from Chinese
authorities. The main concern for shareholders will be what the
company does now.
    Under boss Ed Breen, DuPont has undertaken a series of
mergers and spinoffs. The result is a collection worth less than
when the shakeup started.
DuPont keeps turning to M&A, however. Its plan was to nix
lower-margin operations and buy into more promising ones. Rogers
offered access to the fast-growing electric vehicle market. To
pay for the deal, DuPont sold most of its so-called Mobility &
Materials division to Celanese  CE.N  for $11 billion.
    The problem is that DuPont ditched old businesses at lower
valuation multiples to fund purchases at much higher ones. That
sort of strategy is hard to swallow when the wheeling and
dealing creates so little value. A 5% jump in DuPont’s share
price on Wednesday underscores the point. Returning the freed-up
divestiture proceeds to shareholders would be a better option
than chasing yet another similar takeover. (By Jonathan
Guilford)
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 (Editing by Jeffrey Goldfarb and Sharon Lam)
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