3M Deconsolidates Venezuelan Subsidiary
3M has deconsolidated its Venezuelan subsidiary as unrest continues to roil the South American country.
In a June 11 SEC filing, 3M officials cited concerns over Venezuela’s “unstable environment and heightened unrest that have led to a sustained lack of demand.”
The company expects the circumstances to “continue for the foreseeable future.” The deconsolidation will result in a $160 million charge in 3M’s second quarter, according to the company.
According to the SEC filing, the move won’t cause any economic impact to 3M.
The subsidiary’s operations were “immaterial to 3M’s overall operations,” company officials said.
3M isn’t the first Minnesota company affected by changes in Venezuela. In January 2016, St. Paul-based Ecolab announced it deconsolidated its operations in Venezuela.
In a press release issued at the time, Ecolab chairman and CEO Douglas Baker Jr. cited “continued deteriorating economic conditions and currency exchange control regulations” among the reasons for the move.
Ecolab took a roughly $120 million charge in 2015’s fourth quarter as a result of the deconsolidation.
The move isn’t unique to Minnesota businesses, either. In 2015, big dogs like Colgate-Palmolive, Procter & Gamble and PepsiCo also deconsolidated the financial results of their Venezuelan operations, Reuters reported.
For its part, Minneapolis-based General Mills in 2016 sold its Venezuela business to private international investor Lengfeld Inc.