Skip to content

3M to Spin Off Health Care Business

 | 

The 3M Company announced on July 26th that it will spin off its health care business into a separate, publicly-traded company. The health care business will focus on wound care, oral care, healthcare IT, and biopharma filtration. The current health care business lines include bandages, skin adhesives, oral aligners, air purifiers, optical lenses, and the Bair Hugger™ surgical warming system that is currently the subject of nearly 6,000 lawsuits.

3M’s health care business generated $8.6 billion in 2021, which amounted to about one-quarter of the company’s total revenue. 3M confirmed that the non-healthcare main company will retain liability for all non-healthcare-related litigation, including the Combat Arms Earplugs litigation and PFAS litigation.

3M expects the move to increase the companies’ agility and focus to better position both companies for long term success and ability to tailor capital allocation strategies. In discussing the proposed move, 3M chairman and chief executive officer Mike Roman stated:

Disciplined portfolio management is a hallmark of our growth strategy. Our management team and board continually evaluate the strategic options that will best drive long term sustainable growth and value. The decision to spin off our Health Care business will result in two well-capitalized, world-class companies, well positioned to pursue their respective priorities.

This move comes off a string of similar moves from multi-national conglomerates, including General Electric Co.’s separation of its power, aviation, and healthcare businesses; Johnson & Johnson’s spin-off of its consumer health company; and United Technology’s spin-off and subsequent merger with Raytheon. The trend towards spinning off various businesses within these conglomerates comes as consensus grows among investors that businesses perform best when streamlined, according to Reuters.

Tags

, ,

By using this blog, you agree and understand that no information is being provided in the context of any attorney-client relationship. You further agree and understand that nothing herein is intended to be legal advice. This blog is solely informational in nature, and is not intended as, and should not be used as, a substitute for competent legal advice from a retained and licensed attorney in your state. Knobbe Martens LLP makes no representations or warranties as to the accuracy, completeness, timeliness or availability of the information in this blog. Knobbe Martens LLP will not be liable for any injury or damages relating to your use of, or access to, any such information. Knobbe Martens LLP undertakes no obligation to correct or update information on this blog, which may be incorrect or become incorrect or out of date over time. Knobbe Martens LLP reserves the right to alter or delete content or information on the blog at any time. This blog contains links and references to other websites and publications that you may find of interest. Knobbe Martens LLP does not control, promote, endorse or otherwise have any affiliation with any other websites or publications unless those websites or publications expressly state such an affiliation. Knobbe Martens LLP further has no responsibility for, and makes no representations regarding, the content, accuracy or any other aspect of the information in such websites or publications.
close modal