3M Company (MMM - Analyst Report), a globally diversified technology company, has reorganized its business groups to better serve its operating market. The company had been operating through six business groups: Consumer and Office, Display and Graphics, Electro and Communications, Healthcare, Industrial and Transportation, Safety, Security and Protection Services Business.
After the restructuring the company will operate through five business groups: Consumer (2011 sales of $4.2 billion), Industrial ($9.6 billion), Health Care ($5.0 billion), Safety & Graphics ($5.5 billion), and Electronics & Energy ($5.7 billion). The last two segments have been newly formed.
The restructured groups are effective immediately. The company will be providing the restated historical figures for the two new segments from first quarter of 2013. Safety & Graphics group will comprise nine operating divisions (3M Touch Systems, Communication Markets, Electrical Markets, Electronic Solutions, Electronics Markets Materials, Infrastructure Protection, Mobile Interactive Solutions, Optical Systems and Renewable Energy). Electronics & Energy will have eight operating divisions (Architectural Markets, Building & Commercial Services, Commercial Graphics, Industrial Mineral Products, Mining, Oil & Gas Solutions, Occupational Health & Environmental Safety, Security Systems and Traffic Safety Systems). Along with this reshuffle, the company also made some changes in its leadership positions.
Through this reorganization the company believes that it will be able to provide enhanced services to its customers globally. 3M, which now operates in as many as 65 countries worldwide, expects to expand its presence in the markets being served by it. Further, the company will also be able to compete better in its operating markets, taking full advantage of the opportunities for innovation and commercialization. The major competitors of 3M are Avery Dennison Corporation (AVY - Analyst Report), EI DuPont de Nemours & Co. (DD - Analyst Report) and Johnson & Johnson (JNJ - Analyst Report).
The company also announced that it has dropped its plan to acquire Avery Dennison’s Office and Consumer Products business. The agreement entered into by the two companies has been terminated.
We continue to maintain a Neutral rating on 3M Company for the long term and a Zacks #3 Rank (Hold recommendation) over the next one-to-three months.