U.S – Neogen Corporation, an international developer of food safety solutions, has announced a definitive merger with 3M, an American multinational conglomerate corporation, that will see 3M’s food safety business tie up with Neogen.
The combination will create an innovative leader in the food safety sector with a comprehensive product range and a strategic focus on the category’s long-term growth opportunities.
According to Neogen’s President and Chief Executive Officer, John Adent, this combination will enhance Neogen’s position in this new era of food security, equipping them with an expanded product line that enables them to capitalize on their growing footprint, reaching more customers, more often, while continuing their track record of strong and consistent growth.
“The heightened global focus on food security, sustainability and supply chain solutions around the world presents exciting opportunities for NEOGEN to be positioned as an innovative leader at the forefront of the growth and digitization of the industry. We’re excited to welcome 3M’s Food Safety employees to the NEOGEN team, and we’re looking forward to demonstrating the immense benefits of this combination to our customers, employees and shareholders,” he expressed.
The transaction implies an enterprise value for 3M’s food safety business of approximately US$5.3 billion, including US$1 billion in new debt to be incurred by 3M’s food safety business.
3M’s food safety business will provide 3M with a consideration valued at approximately US$1 billion, subject to closing and other adjustments. The combined company is however expected to have an enterprise value of approximately US$9.3 billion, based on NEOGEN’s closing share price as of December 13, 2021.
Under the terms of the definitive agreements, which involve a tax-free “Reverse Morris Trust” structure, existing NEOGEN shareholders will continue to own approximately 49.9% of the combined company, and 3M shareholders will receive approximately 50.1% of the combined company. The Boards of Directors of both NEOGEN and 3M have unanimously approved the transaction.
The Reverse Morris Trust is a form of tax-avoidance employed by companies. This tactic enables the company to sell off unwanted assets without incurring tax obligations on gains arising from the sale of these assets.
Mike Roman, 3M’s Chairman and Chief Executive Officer pointed out that Neogen and 3M share a deep commitment to quality, innovation and customer satisfaction and long histories of industry leadership.
“By combining our Food Safety business with NEOGEN, we will create an organization well positioned to capture long-term profitable growth. This transaction further evolves our strategy, focuses our health care business and benefits our stakeholders, as we actively manage our portfolio to drive growth and deliver shareholder value,” he noted.
3M’s new kitchen scissors inventions
In addition to the merger, 3M has expanded its range of kitchen scissors with the launch of the Scotch Anti-Bacterial Premium Kitchen Scissors and Scotch Detachable Titanium Kitchen Scissors.
Distinguished by three colours – red, green, and purple, for easy identification and prevention of cross-contamination, everybody can now prepare meals in a snap by using specific pairs of scissors that are used to snip vegetables and snap bones from cooked and raw meat.
The non-stick, oil repelling blades or the Scotch Detachable Titanium Kitchen Scissors are also detachable for easy cleaning. This not only prevents bacteria breeding or build up in between blades, it also reduces the chance of food contamination.