3M to unstick its healthcare unit

The trend for conglomerates to spin off their healthcare units gained another adherent yesterday. Perhaps better known for Scotch tape and Post-it notes, 3M also has a medtech business mainly focused on wound care, dental and healthcare IT products. But not for long: 3M said yesterday that it would spin off the business by the end of next year, keeping a stake of just under 20%. The healthcare unit, which had sales of $8.6bn last year, will become a public company, the idea being that once independent it will be more agile and able to focus on making company-specific investment decisions. But 3M must hope that market conditions improve by the end of 2023. This year’s healthcare spinouts have performed poorly, with Zimvie in particular suffering a dramatic fall in its market cap. Two other separations are in the pipeline, but the conglomerate is not dead yet. Though Johnson & Johnson is disposing of its consumer care business, it is keeping its medtech and pharma operations together; Roche, too, is happy with its drugs and diagnostics under one umbrella. And in March shareholders firmly rejected Toshiba’s plan to spin off its devices business.