3M to spin off its medical business into a new public company

3M announced on Tuesday that it will spin off its medical business into a separate public company.

The new business will focus on wound and oral care, healthcare information technology and biopharmaceutical filtration. says in the release. This includes products such as bandages, skin patches, oral aligners, air purifiers, and optical lenses.

The company’s health care products also include the Bair Hugger surgical heating system, which currently the subject of nearly 6,000 lawsuits. 3M claims that the product is not related to infections in the surgical area.

In 2021, 3M’s health product sales exceeded $8 billion. The deal is expected to close by the end of next year, with 3M retaining a 19.9% ​​stake in the new company.

The announcement comes after 3M said its second-quarter revenue fell nearly 3% to $8.7 billion. Net income fell to $78 million from $1.5 billion a year earlier, including $1.2 billion before taxes related to the settlement of a Combat Arms ear plug litigation.

The company said Aearo Technologies, its subsidiary that makes Combat Arms earplugs, filed for Chapter 11 bankruptcy create a trust to resolve all legal claims related to the product. 3M has said it believes the earplugs are safe and effective when used correctly, but they are facing increasing litigation nonetheless.

After eliminating this one-time payment, 3M earned $2.48 per share. The performance has exceeded all expectations. Analysts had expected 3M to earn $2.42 per share on revenue of $8.58 billion, according to Refinitv.

The company’s shares rose 6% in intraday trading.

3M is also spinning off its food safety business at the same time. This branch will merge with the Neogene and is expected to be sold by September.

— Reuters contributed to this report.