Published on Aug 23, 2022
China’s antitrust review of DuPont’s (DD) proposed $5.2 billion acquisition of Rogers Corporation (ROG) has hit an impasse as the companies haven’t yet resolved stiff industry concerns with their deal, sources familiar with the matter said.
That’s led to case handlers at the State Administration for Market Regulation (SAMR) making very little progress in their investigation, even after their initial 180-day review of the transaction recently expired, the sources said.
That lack of movement is in part because the companies still haven’t offered a remedy proposal sufficient to address industry concerns with the transaction, sources said.
The concerns, which one of the sources described as “enormous,” center on the deal’s impact on the sensitive printed circuit board (PCB) materials market, the sources said.
Chinese industry participants have complained to SAMR about what they call Rogers’ dominance in polytetrafluoroethylene copper clad laminate (PTFE CCL)—a material in high-frequency PCBs used in 3G and 4G mobile communications equipment and other devices. Rogers holds over a 90% market share in the global PTFE CCL market, industry analysts have said.
The stiff industry opposition and lack of SAMR progress recently forced the parties to pull and refile their deal notification paperwork, sources said. The move re-started SAMR’s 180-day review clock, and will give the parties additional time to negotiate remedies and resolve local market concerns.
The length of the SAMR process—which shows no signs of concluding soon—has already surpassed the companies’ expectations; in announcing their deal in November they said they expected to close in the second quarter of this year.
But Rogers in a subsequent securities filing updated that guidance to “late in the second quarter or early in the third quarter,” and the company more recently has said it now expects to close in the “third quarter of 2022.”
The companies’ merger agreement’s end date automatically extends to November 1 in the event that the deal hasn’t yet won all required antitrust clearances.
SAMR doesn’t comment on ongoing cases. Spokespeople for DuPont and Rogers didn’t respond to requests for comment.