3M to spin-off its Health Care arm into a standalone business to create ‘long-term value’

3M to spin-off its Health Care arm into a standalone business to create ‘long-term value’

THE WHAT? 3M has announced it intends to spin off its health care arm, which will result in two public companies positioned to ‘pursue their respective growth plans.’ 

THE DETAILS According to a press release, “The New 3M will remain a leading global material science innovator serving customers across a range of industrial and consumer end markets, and Health Care will be a leading global diversified healthcare technology company focused on wound care, healthcare IT, oral care, and biopharma filtration.”

THE WHY? The standalone companies are expected to benefit from enhanced agility and focus for long-term success, the ability to tailor capital allocation strategies and make company-specific investment decisions to drive innovation and growth; compelling investment profiles appealing to different investor bases; and, distinct boards and management teams comprised of leaders with relevant expertise and track records driving value creation.

3M Chairman and Chief Executive Officer Mike Roman said, “Today’s actions advance our ability to create value for customers and shareholders.

“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.”