3M remains on track to spin out its healthcare unit in the first half of the year, the company said as part of its fourth-quarter results.
The company announced the plan to separate its healthcare business in July 2022, at which time it aimed to complete the split by the end of 2023. While the process has taken longer than originally planned, there have been no further delays since 3M pushed back the target completion date into the first half of 2024.
On a conference call with investors to discuss fourth-quarter results Tuesday, Bruce Jermeland, 3M’s senior vice president of investor relations, confirmed the spinoff remains on track, subject to the company meeting the closing conditions.
3M worked to create a leadership team for the independent healthcare company, which will be called Solventum, last year. Bryan Hanson, formerly the CEO of Zimmer Biomet, will lead the company. Wayde McMillan has swapped the CFO post at Insulet for the same role at Solventum. Chris Barry, the former CEO of Nuvasive, is set to become group president of the Medical Solutions Division.
Barry’s division was a bright spot in the fourth quarter, reporting organic sales growth in the “low single digits” while revenues at the separation and purification, oral care and health information systems units fell. 3M expects the healthcare unit to achieve sales growth of flat to low single digits in 2024.
3M CFO Monish Patolawala told investors Hanson and his team will share more details as the completion of the transaction approaches.
Fitch Ratings analysts estimate 3M “will receive at least $7 billion in one-time dividends” when it completes the transaction. The analysts expect the company to use the money to pay legal settlements, including from the combat earplug case, and to reduce its debt.