Businesses in line for divestment are predominantly in the engineering polymers and performance resins sectors as well as the company's stake in the DuPont Teijin Films joint venture. These include brands such as Zytel nylon 6/6, Delrin acetal, Hytrel thermoplastic polyester elastomers, Crastin polybutylene terephthalate, Vamac ethylene acrylic elastomers and Tedlar polyvinyl fluoride.
Combined, these businesses represent approximately $4.2 billion in sales and about $1 billion of operating profit, DuPont said.
Karig, the managing director of Mathelin Bay Associates in St. Louis, said DuPont "is likely positioning the company to move even higher up the value-added ladder by investing in materials for faster growing and even more profitable markets such as electric cars."
Industry consultant Robert Eller said that DuPont's engineering thermoplastics business "has trended toward maturity and commoditization," resulting in increased competition and lower profit margins.
Eller, president of Robert Eller Associates in Akron, Ohio, added that these changes "are occurring in an environment of very rapid growth in new target sectors," such as electric vehicles, where he said that growth "is very fast, immediate and demanding that participants establish a position."
According to Eller, the purchase of Rogers is "a move within growth and profitability targets" for DuPont. He added that Rogers "has a solid grounding in advanced technology materials and silicones, which continue to be a fast growth, value opportunity."
Nylon is a major part of DuPont's history. The firm began commercial production of nylon 6/6 fiber in December 1939, at a newly built plant in Seaford, Del., about 90 miles from company headquarters in Wilmington.
DuPont's work on developing nylon was led by Wallace Carothers, a legendary researcher who left the faculty of Harvard University to join DuPont in 1928. Carothers was recruited by Charles Stine—another DuPont research legend—and soon began work on several projects at the firm's Experimental Station lab in Wilmington.
Today, DuPont is a major global producer of specialty chemicals and plastics, including nylon resin. The 219-year-old firm posted sales of $20.4 billion in 2020.
The plastics sale and Rogers deal continues a tumultuous era for DuPont. The firm merged with fellow plastics and chemicals giant Dow Inc. from 2017-19 before becoming an independent company again. Marc Doyle then served as CEO for less than a year before being replaced by former CEO Ed Breen in early 2020.
Now DuPont has entered into a definitive agreement to acquire Chandler, Ariz.-based Rogers, a specialist in engineered materials and components, with plans to use the proceeds from the sale of the engineering polymers business to finance the deal.
Breen told analysts that DuPont has already fielded inquiries, and he hopes to close a sale of the polymers business by the end of 2022.
DuPont said Rogers' value-added products, such as high-frequency circuit materials, ceramic substrates for power semiconductor devices and high-performance foams, will offer it competitive edge.
Rogers has more than 3,500 employees and 14 manufacturing sites in North America, Europe and Asia. Its 2021 expected sales are approximately $950 million.
The Rogers purchase is expected to close in the second quarter of 2022, DuPont said.
"With today's announcements, we are sharpening our focus on high-growth, high-value opportunities in sectors with steady long-term secular growth trends," Breen said in a statement.
Moving forward, he said, DuPont's portfolio will be centered on "pillars of electronics, water, protection, industrial technologies and next-generation automotive."
Bruce Hoechner, Rogers' president and CEO, said DuPont is a "natural fit" for the specialty engineered materials company.
"DuPont is a proven leader in advanced specialty materials, and Rogers will benefit from DuPont's global reach and strong technical and commercial depth," he said.
On Wall Street, DuPont's per-share stock price began the year around $82 but was near $79.50 in early trading Nov. 5 for a decline of 3 percent.
Rubber News and European Rubber Journal contributed to this report.
