(Bloomberg) — 3M agreed to separate its food-safety business and join it with Neogen Corp. in a deal that would value the combined company at about $9.3 billion.
Under the terms of the transaction, which involves a tax-free “reverse Morris trust” structure, Neogen shareholders will own 49.9% of the new entity and 3M shareholders about 50.1%, the companies said in a statement Tuesday. The boards of both 3M and Neogen approved the deal.
Neogen jumped as much as 14% in pre-market trading in New York, while 3M gained 0.6%.
The transaction implies an enterprise value for 3M’s food safety business of $5.3 billion, including $1 billion of new debt to be incurred by the unit. The merged company is expected to have adjusted earnings before interest, tax, depreciation and amortization of about $300 million in the first full year after the closing, according to the release.
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