3M and Avery Dennison Corp. announced October 3 that they had terminated the agreement under which 3M would have purchased Avery Dennison’s Office and Consumer Products business, a deal valued at approximately $550 million.
The companies had announced the deal in December 2011, but the U.S. Department of Justice had threatened to file a civil lawsuit to block the acquisition. The department said in a statement the proposed deal would have “substantially lessened competition in the sale of labels and sticky notes, resulting in higher prices and reduced innovation for products that millions of American consumers use every day.”
On September 4, DOJ had welcomed the companies’ decision to abandon the deal. But that announcement was premature, as the two companies quickly responded that they working together to address the department’s concerns.
Avery Dennison said it will continue to pursue a divestiture of the Office and Consumer Products business. In 2011, the division had sales of $765 million.
In today’s announcement, Jesse Singh, vice president and general manager, 3M Stationery and Office Supplies Division, said the company was “disappointed with this turn of events” but would remain focused on “investing in product innovation and providing our customers with a broad range of premier products.”