3M to combine food-safety business with Neogen

2 minute read
Register now for FREE unlimited access to Reuters.com

Dec 14 (Reuters) - 3M Co (MMM.N) said on Tuesday it would merge its food-safety business with food testing and animal healthcare products maker Neogen Corp (NEOG.O) in a tax-free transaction, as the industrial giant sharpens its healthcare focus.

The deal gives the unit, which makes products for pathogen testing and allergen detection, an enterprise value of about $5.3 billion, including $1 billion in new debt.

3M, the biggest U.S. producer of N95 masks, will receive about $1 billion.

Register now for FREE unlimited access to Reuters.com

"This transaction further evolves our strategy, focuses our health care business and benefits our stakeholders," 3M Chief Executive Officer Mike Roman said in a statement.

The industrial conglomerate, which also makes Post-It notes and industrial sandpaper, had tapped advisors last year for a potential sale of the unit, Bloomberg reported.

Shares of Neogen climbed 6% premarket, while those of 3M rose 1.29%.

Neogen boss John Adent will lead the combined company, which will be 50.1% owned by 3M and is expected to have an enterprise value of about $9.3 billion.

The deal is being structured as a Reverse Morris Trust, a strategic way to divest a division tax-free.

Centerview Partners LLC is the financial adviser and Weil, Gotshal & Manges the legal counsel to Neogen.

Goldman Sachs is the financial adviser and Wachtell, Lipton, Rosen & Katz the legal counsel to 3M.

Register now for FREE unlimited access to Reuters.com
Reporting by Aishwarya Nair in Bengaluru; Editing by Sriraj Kalluvila

Our Standards: The Thomson Reuters Trust Principles.