3M to combine food-safety business with Neogen

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.

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“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%.

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