US-based tech industrial giant, 3M is spinning off its Healthcare business into a separate public entity.
“Spinning off the healthcare business will create two well-capitalised and world-class businesses, which will be well positioned to engage in their respective priorities,” said Mike Roman, 3M’s CEO and Chairman, in a statement.
The newly developed public entity will focus on healthcare IT, biopharma filtration, wound and oral care, etc. Its products will range from bandages, air purifiers and skin adhesives to oral aligners and optical lenses. The deal will be tax-free and is expected to complete by the end of 2023.
Moving forward, the new 3M will remain a leading global material science innovator, serving customers across industrial and consumer end markets. And the healthcare segment will be a leading global diversified healthcare technology company. 3M will retain a 19.9% holding in the new healthcare business, which they plan to monetise in future.
About 3M
From selling sandpaper to becoming a Fortune 500 company, 3M has come a long way. It is one of the largest industrial companies across the globe. Founded in 1902, this US-based company has six founders from different backgrounds—Danley Budd, Eric Paley, Henry Bryan, Hermon Cable, John Dwan, and William McGonagle.
3M has diversified its business into five segments, of which the healthcare segment is its third most profitable business contributing 18.4% in sales. 3M’s health segment is the most trusted source for medical equipment. They make products ranging from stethoscopes to patient-care-related medical supplies. Building technology to solve health problems is the main focus of this segment.
3M’s Market Presence
3M is a globally diversified company having over 90,000 employees worldwide. This century-old company is one of the top 100 companies in the US.
In 2021, 3M’s annual sales were over $35.4 billion and had $47.1 billion in total assets. They’re one of the staples in the US stock market and one of the 30 companies that make up the Decentralised Autonomous Organisation (DAO). As of now (August 2022), 3M has a market cap of $85.81 billion. It is the world’s 153rd most valuable company and has seen steady growth over the years.
While 3M is spinning off its healthcare business, it is also drawing out its food safety business in a separate transaction with Neogen, a leading developer of food and animal safety products, that is expected to close in September 2022.
3M is spinning off its healthcare business
Healthcare is the largest and the fastest growing industry, expected to reach $11.35 billion by 2025. With big techs like Amazon, Google and Microsoft, 3M also knows the potential of this industry.
The rise of AI and broader use of healthtech is bringing change that 3M recognises and is creating separate divisions for it. We can only wait and watch how this will disrupt the healthcare industry.
