Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Avery Dennison Corporation (AVY - Analyst Report) has clarified that the agreement to sell its Office and Consumer Products to 3M Co. (MMM - Analyst Report) is still on. The statement was in response to a news release from the U.S. Department of Justice (DOJ) declaring the abandonment of the deal. 

The DOJ had earlier informed the companies that it would file a civil antitrust lawsuit to block the deal. According to the DOJ, the proposed merger will give 3M Co. more than an 80% share of both the U.S. labels and sticky notes markets and result in reduced competition in the sale of labels and sticky notes. This would in turn lead to higher prices and reduced innovation for products that millions of American consumers use every day.
 
In light of concerns about the transaction raised by the DOJ, the companies have voluntarily withdrawn the notification and report forms filed regarding the transaction under the Hart-Scott-Rodino Act. The companies stated that together they will look for options to address the DOJ’s concerns, obtain regulatory approval, and complete the transaction.
 
Avery Dennison’s Office and Consumer Products unit manufactures and sells a wide range of office and printable media products under the Avery Dennison brand name. The company had long held a strong position in the labels business. 3M Co. sold sticky notes under its Post-it Brand.
 
In 2009, 3M entered the labels market, intensifying the competition for Avery Dennison.  In retaliation, Avery Dennison lowered wholesale prices, increased promotions and customer rebates and accelerated innovations in labels. Avery Dennison also started selling its own brand of sticky notes.  
However, the segment’s results were affected due to weak end-market demand and increased competition. Increased investment in demand creation, consumer promotions, and innovation, as well as lower volume pressurized margins. Consequently, in December 2011, Avery agreed to sell its Office and Consumer Products Group, for approximately $550 million to 3M Co. 
 
St. Paul, Minnesota-based 3M Company, together with its subsidiaries, operates as a diversified technology company with manufacturing operations spread over 60 countries worldwide. It has more than 35 business units organized into six segments: Consumer and Office, Display and Graphics, Electro and Communications, Healthcare, Industrial and Transportation, and Safety, Security and Protection Services Business. 
 
Pasadena, California-based Avery Dennison produces pressure-sensitive materials, office products and a variety of tickets, tags, labels and other converted products. Avery is a Fortune 500 company operating over 200 manufacturing and distribution facilities with roughly 32,000 employees in more than 60 countries. It also competes with Bemis Company Inc. (BMS - Analyst Report).
 
The shares of Avery Dennison are currently maintaining a Zacks #3 Rank (Hold) over the short term.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
VERTEX ENERG VTNR 8.25 +10.59%
MODINE MANUF MOD 17.12 +8.77%
CLAYTON WILL CWEI 140.03 +7.27%
E*TRADE FINA ETFC 22.67 +5.44%
KNIGHTSBRIDG VLCCF 13.22 +5.42%