3M’s Health Care Business to Become Separate Company
Maplewood-based manufacturer 3M Co. is getting out of the health care business, for the most part.
On Tuesday morning, 3M announced that it will spin off its health care business into a separate publicly traded company. The new business will focus exclusively on wound care, oral care, health care IT, and filtration, according to a news release.
Health care generated a sizable level of income for 3M: In 2021, that segment produced $8.61 billion in sales for 3M, or about 25 percent of the company’s entire revenue. But company execs say the split will enable 3M to improve its bottom line.
“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,” said 3M chairman and CEO Mike Roman in the news release. “Disciplined portfolio management is a hallmark of our growth strategy.”
3M isn’t severing all ties to health care, though: The company will retain a 19.9 percent in the new business.
3M’s remaining operations will focus on material sciences, and it will operate under the banner “New 3M.” The split is slated to wrap up by the end of 2023 in a tax-free transaction, according to 3M.
Meanwhile, 3M on Tuesday morning also reported a fairly substantial dip in net income in its second quarter, largely owing to litigation costs related to its military-grade earplugs. In its second quarter, 3M logged net income for $78 million, down from $1.5 billion in the same quarter last year.
3M reported net sales of $8.7 billion in the second quarter of 2022, down $8.59 billion year over year.
As of late Tuesday morning, 3M’s stock was trading at $143.54 a share, up from $134.23 on Monday.