LANSING, MICH. — Neogen Corp. is acquiring 3M’s food safety business. The acquisition will be in the form of a Reverse Morris Trust where 3M’s food safety business will be spun-off to 3M shareholders and then merged with a subsidiary of Neogen.
At the completion of the transaction, Neogen will issue shares to 3M shareholders such that 3M shareholders will receive approximately 50.1% of the combined company and existing Neogen shareholders will continue to own approximately 49.9% of the combined company. In connection with the transaction, 3M also will receive consideration valued at approximately $1 billion, subject to closing and other adjustments.
The transaction values 3M’s food safety business at approximately $5.3 billion. Once completed, the combined business is expected to have a value of $9.3 billion based on Neogen’s closing share price as of Dec. 13.
“This combination will enhance Neogen’s position in this new era of food security, equipping us with an expanded product line that enables us to capitalize on our growing footprint, reaching more customers, more often, while continuing our track record of strong and consistent growth,” said John Adent, Neogen’s president and chief executive officer. “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.”
Specifically, Neogen said the merger will expand its capabilities in indicator testing and pathogen detection. It also will expand Neogen’s opportunities beyond the US and Europe and give the company greater capabilities to lead the digitization of the food security industry.
Mr. Adent and the company’s existing management team will lead the combined company. The size of Neogen’s board of directors will be increased by two independent board members appointed by 3M at the closing.
“By combining our food safety business with Neogen, we will create an organization well positioned to capture long-term profitable growth,” said Mike Roman, CEO of 3M. “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.”
The transaction is expected to close by the end of the third quarter of 2022.