By Dhirendra Tripathi
Investing.com – DuPont stock (NYSE:DD) traded 4.4% higher in premarket Friday after it announced an $11 billion deal to sell a majority of its mobility and material business as well as some other product lines to Celanese for $11 billion.
Celanese (NYSE:CE) also traded higher in premarket, by 3%.
The all-cash deal also includes engineering polymers business and select products within the performance resins and advanced solutions business lines. Combined, these businesses generated net sales of around $3.5 billion and base operating income of about $0.8 billion in 2021. However, fourth quarter volumes in the Mobility & Materials business fell, reflecting the softness in global auto production.
Celanese has all commitments in place to finance the transaction, which is expected to close around the end of 2022, a joint press release said.
DuPont said it will use the proceeds to fund its acquisition of Rogers (NYSE:ROG) as well as its share repurchases, and the money from the deal may also be used for further M&A opportunities. DuPont is buying the electronics materials specialist for $5.2 billion.
Rogers makes products for use in high-frequency circuit materials, ceramic substrates for power semiconductor devices, and high-performance foams that go into a variety of highly specialized end markets, but a growing share of its business is with the EV sector and 5G telecommunications.
DuPont said it is separately advancing the process to divest the Delrin thermoplastic business that generated net sales of around $0.55 billion in 2021. The company aims to wrap up a deal in the first quarter of 2023.
Some of the businesses under its Mobility & Materials division are not being divested, including Adhesives and Tedlar.