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3M going to separate?  CEO says “I won’t predict”

When General Electric announced last month that it would split into three companies, and Johnson & Johnson announced that it would split into two, investors and analysts starting to look around and wonder: who is the next ?

Some turned to 3M, based in Maplewood, which has four separate healthcare business units; consumer goods; transport and electronics; and security and industry.

But if a split is possible for the 119-year-old company, it’s probably not on hold.

“The corporate division is at the center of our minds today. For us, it’s really about getting back to, fundamentally, where do we create value,” 3M General Manager Mike Roman said during from the Credit Suisse Virtual Industrials conference on Thursday. “I’m not going to predict where we’re going to go, but that’s what drives us.”

Roman said 3M’s business portfolio will be shaped “around fundamental strengths where we are uniquely positioned and have the ability to differentiate customer value from shareholder returns.”

“We as a business are used to moving our portfolio to where we can uniquely generate value,” he said. “This increasingly over the past decade has included divestitures.”

General Electric broke up after its shares fell more than 50% in the past five years, wiping out $ 100 billion in market valuation. At the same time, 3M’s shares were flat and traded at almost the same dollar amount on Thursday as on December 2, 2016.

Credit Suisse analyst John Walsh pointed out that 3M is “a materials science company” as opposed to an original equipment manufacturer. The way the company’s technology cuts across multiple business segments makes it a less ripe textbook conglomerate for a disruption.

But, said Roman, it all comes down to “value for customers and returns for shareholders.”

“It’s going to guide us in how we think about the portfolio we have today versus the portfolio we will have in a generation.”

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