American multinational conglomerate 3M is joining the long list of companies aiming to simplify their business. The way 3M is going to do it is by spinning off its healthcare business into a standalone, publicly-traded company.
According to the official announcement made on Tuesday, the new company will deal in “wound care, oral care, healthcare IT, and biopharma filtration.” The target date for the completion of the process is the end of 2023.
In a statement issued on the subject, 3M CEO Mike Roman said that the decision was made in order to create additional value for both the customers and shareholders.
“The decision to spin off our Health Care business will result in two well-capitalized, world-class companies, well positioned to pursue their respective priorities,” Roman added.
3M also announced in a separate press release that the company’s earplugs unit, Aearo Technologies, is filing for bankruptcy. The move was made in an effort to “resolve litigation related to combat arms earplugs.”
3M is currently facing accusations that their earplugs were defective and caused a loss of hearing for close to 300,000 former and active military members. As part of the Chapter 11 filing, the company committed $1 billion to “fund a trust to resolve all claims determined to be entitled to compensation.”