3M Co. scrapped an agreement to buy Avery Dennison Corp.’s office products business, a deal the U.S. Justice Department opposed because of antitrust concerns.
The $550 million takeover would have given St. Paul, Minnesota-based 3M more than 80 percent of the U.S. market for labels and sticky notes, the Justice Department said in September. Wednesday’s announcement follows a plan by 3M and Avery Dennison last month to “explore options” to respond to the department’s concerns and win regulatory approvals.
“While we are disappointed with this turn of events, we remain focused, as always, on investing in product innovation,” Jesse Singh, vice president and general manager of 3M’s Stationery and Office Supplies Division, said in a statement.
3M had planned to complete the purchase in the second half of this year.
The Justice Department’s investigation found that 3M and Avery have dominated adjacent parts of the office products business for many years, with Avery making labels and 3M selling sticky notes under its Post-it brand. The two companies are the largest label makers in the world, according to Deane Dray, an analyst at Citigroup Inc. in New York.
Avery Dennison fell 4.3 percent to $30.10 at 4:55 p.m. in New York in late trading after the announcement. 3M rose 0.3 percent to $93.78 at the close.
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