WASHINGTON, Sept 4 3M Co is abandoning
its plan to acquire Avery Dennison Corp's office
products groups after antitrust authorities at the U.S. Justice
Department threatened a civil lawsuit to block the deal, the
department said on Tuesday.
The department disclosed its objections in a news release,
saying the proposed acquisition "would have substantially
lessened competition in the sale of labels and sticky notes."
Consumers would have seen higher prices and reduced
innovation as a result, the department said.
The proposed deal, announced in January, was to be a $550
million cash purchase by 3M. It would have brought together two
families of well-known consumer products, such as 3M's Post-It
notes and Avery's HI-LITERS markers.
Although the agreement excluded some assets, Avery would
have been left without its brand or the sales and distribution
system necessary to compete in the sticky-notes market, the
Justice Department said in its news release.
"We welcome the companies' decision to abandon this deal,
which raised competitive concerns in the sale of labels and
sticky notes," said Joseph Wayland, the acting assistant
attorney general for antitrust matters.
Spokespeople for 3M and Avery were not immediately available
for comment after business hours.