3M Reviews Potential Divestments

3M Co. (NYSE: MMM) is considering selling billions of dollars of assets from its $11 billion industrial operations unit, according to people familiar with the matter. The conglomerate is working with Goldman Sachs as it evaluates options, though no final decision has been made.

The safety and industrials unit, which generated $11 billion in revenue in 2024, includes:

Aftermarket auto products
Personal safety equipment
Industrial adhesives and tapes

Strategic Shift Under CEO William Brown

CEO William Brown, who took over in 2024, has spoken about asset sales “where appropriate.”
3M has already spun off its healthcare arm into Solventum Corp. (SOLV), which now carries a market value of nearly $13 billion.
Analysts at Bloomberg Intelligence noted that “product pruning is underway, but bigger portfolio changes may be needed.”

Financial and Legal Pressures

3M’s stock closed at $158.66 Friday, giving it a market cap of $84.5 billion, up 18% over the past year.
A key focus for Brown has been boosting cash flow and sales growth, with all three business groups growing in recent quarters.
However, legal liabilities remain a major constraint:
- $12.5B settlement over PFAS “forever chemicals” to fund water treatment.
- $6B settlement for defective military earplugs.
Barclays analyst Julian Mitchell noted these obligations could limit large-scale sales, as buyers may not want to assume such liabilities.

Why It Matters for Investors

3M is under pressure to reinvigorate growth by redirecting R&D toward product innovation and commercialization.
Analysts believe some divestments are likely within the next year, helping management sharpen focus and potentially unlock value.
The industrial unit sale would mark another significant step in reshaping the company, following the healthcare spinoff.