3M Co (NYSE:MMM) terminated its $550 million deal to buy Avery Dennison Corporation (NYSE:AVY)’s office and consumer products business yesterday.
“While we are disappointed with this turn of events, we remain focused, as always, on investing in product innovation and providing our customers with a broad range of premier products,” Jesse Singh, an executive at 3M Co (NYSE:MMM), said Wednesday.
The deal in question here was announced way back in January of this year. The sale, if it had worked, would have brought two well-known consumer product families together, including 3M’s Post-It notes and Avery’s HI-LITERS markers.
In early September, the DoJ said it may file a civil antitrust lawsuit to block the deal. The DoJ claimed that the proposed deal would have given 3M more than 80% share of the US labels and sticky notes markets. Following this announcement, both companies had stated that they remained committed to addressing the DoJ’s concerns and to complete the deal.
After the termination of the deal from the diversified manufacturer, 3M Co (NYSE:MMM), Avery said it will continue to pursue a sale of the business. Avery’s shares fell 7.8% to $29, in after-hours trading Wednesday on the New York Stock Exchange.
Apart from this deal, 3M also announced earlier this week, that it had plans to acquire the advanced ceramic maker, Ceradyne Inc., for around $860 million. 3M revealed on Wednesday that it plans to realign its organizational structure, in an effort to improve its competitiveness. Pursuing the same, the company aims to reduce the number of its major business groups to five from six, starting next year. The improved structure will have two new segments: an electronics and energy segment, and a safety and graphics business. Apart from moving renewable energy operations to the electronics and energy unit, the industrial business will remain the same. The health care and consumer segments are expected to remain unchanged.
Inge Thulin, 3M Co (NYSE:MMM)’s chairman and chief executive, said Wednesday, “The change is a natural outcome of our strategy to increase relevance to our customers and to broaden our presence in the markets we serve”.
3M Co (NYSE:MMM) shares closed at $93.78 on the same exchange.