(Bloomberg) -- DuPont called off its planned $5.2 billion acquisition of engineering materials maker Rogers Corp., saying it was unable to get timely clearance from regulators.
DuPont de Nemours Inc. said it will pay a breakup fee of $162.5 million to Chandler, Arizona-based Rogers, whose shares plunged as much as 46% after the close of regular trading. DuPont's brief statement was issued a day short of the one-year anniversary of the deal's announcement.
While Tuesday's statement didn't specify 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 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.
Representatives for the two companies declined to comment beyond the statement.
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.
Mergers that have won SAMR's approval this year include Taiwan-based GlobalWafers Co.'s takeover of Germany's Siltronic AG and Advanced Micro Devices Inc.'s $35 billion acquisition of Xilinx Inc.
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.
DuPont had pitched the Rogers purchase as a way to tap into the rapid growth of electric vehicles and advanced auto electronics. The deal also would have expanded its position in advanced materials for other key growth markets such as clean energy and 5G mobile-phone service.
Wilmington, Delaware-based DuPont's shares rose about 6% in late trading.
(Updates with previous transactions in fifth paragraph.)
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