3M has spun off its healthcare division.
3M has completed the spinoff of its healthcare business into a separate company named Solventum Corporation, valued at over $8 billion.
In the works since 2022, the newly independent business will oversee the development of solutions in wound care, healthcare IT, oral care, and biopharma filtration. It is now listed on the New York Stock Exchange under SOLV.
The decision to break off its healthcare division stemmed from a desire to better tailor capital allocations, invest in growing areas of interest, and appeal to more diverse investors in the medical space, said 3M.
"Both companies are positioned to pursue their respective growth and tailored capital allocation plans, and I am excited to see both companies succeed as they innovate new solutions and create value for their respective stakeholders,” said Mike Roman, 3M chairman and chief executive officer, in a statement.
The new 3M will remain a global material science company focused on the science and technology market, manufacturing, global capabilities, and iconic brands.
For every four shares of 3M common stock, holders received one share of Solventum common stock, with the distribution generally intended to be tax-free. 3M retains 19.9% of outstanding shares of Solventum’s common stock, which will be sold off and monetized within five years following the spinoff.
It originally sought to complete the separation by the end of 2023 but announced in its Q3 2023 earnings statement that it was
pushing back the date to early 2024 to give itself more time to obtain necessary IRS, board, and other government agency approvals that would make the transaction tax-free. It also said that it would be moving ahead with scheduled layoffs and restructuring initiatives to streamline its workflow and reduce structural costs.
At the time, Monish Patolawala, company president and chief financial officer, said that 3M was building executive and board teams and “working through system changes, standing up legal entities, as well as all the regulatory filings that we need to do.”
Bryan Hanson, who previously led medical device company Zimmer Biomet, where he oversaw the spinoff of its spine and dental device businesses as ZimVie in 2022, is now the CEO of Solventum.
Carrie Cox, who has been an advisor to 3M, is the chair of the new company’s board of directors.
