DuPont De Nemours Inc’s decision to cancel the Rogers Corp acquisition deal has raised fears that other Western companies will follow the U.S. chemical group’s lead and abandon planned acquisitions under the pretext that Chinese regulators do not. they will approve, Reuters reported.Reuters).
DuPont said on Tuesday it has discontinued its $ 5.2 billion acquisition of US electronics maker Rogers due to protracted delays in regulatory approval. It would be the first major US deal in four years to fail due to delays in Beijing’s approval. Qualcomm canceled the $ 44 billion purchase of Dutch company NXP Semiconductors NV in 2018 after it failed to gain regulatory approval.
Chinese regulators declined to comment on the DuPont deal and did not provide a reason for the delay in its review. But the failure of the acquisition comes amid renewed trade and geopolitical tensions between Washington and Beijing, fueling investor concerns that mergers could become a victim.
An investor in a merger arbitrage fund, who declined to be named, said deals involving Chinese approval would be closely followed after the DuPont-Rogers deal was terminated.
As a result, shares of some US companies with a significant footprint in China that are closing deals fell on Wednesday.
But some investors have warned that the failure of such deals depends not only on Chinese regulators refusing permission, but also on buyers engaging in transactions.
In Rogers’ case, DuPont happily withdrew rather than giving Chinese regulators more time because this year’s market crash made the acquisition seem expensive than when the deal was signed 12 months ago. said the experts.
“Investors thought DuPont was paying too much for Rogers and expected a price cut,” said Chris Pultz, merger arbitrage portfolio manager at Kellner Capital.