“3M Co. (MMM)’s retreat from a $550 million office-products purchase amid regulatory pressure will let it focus on an even bigger acquisition while forcing deal partner Avery Dennison Corp. (AVY) to put the unit back on the block.
Avery fell as much as 7.8 percent in after-hours trading in New York yesterday following the announcement. Investors may be concerned that Avery will struggle to get another offer and a price that comes close to 3M’s, said Ghansham Panjabi, an analyst at Robert W. Baird & Co. in New York.
“When one of the national bidders is out of the process now, then by definition there are fewer bidders for the asset,” Panjabi said. “The likelihood of the sale is pretty high. The question is, ‘At what price does it get done?’”
3M terminated the Jan. 3 sale accord to buy Avery’s office- products business amid U.S. Justice Department opposition because of overlap between the companies. The move reversed 3M’s pledge last month to keep pursuing federal approval and came after Chief Executive Officer Inge Thulin agreed Oct. 1 to pay $860 million for ceramics maker Ceradyne Inc. (CRDN)”
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