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Why 3M Shares Were Higher Today

Shares of 3M (NYSE: MMM) ended the day higher after the industrial conglomerate completed the spin-off of its healthcare business, which is now known as Solvent (NYSE: SOVL).

Investors cheered the spinoff for a number of reasons, and 3M ended Monday’s session up 6.1%. However, Solventum ended the day with a loss of 0.7%.

The 3M campus.

Image source: 3M.

3M completes the spin-off

Investors had been waiting for more than a year for the spin-off to go ahead. The creation of Solventum represents the culmination of several months of work behind the scenes to prepare the company for an IPO.

3M CEO Mike Roman called it an “important day” for 3M and Solventum, saying, “Both companies are positioned to pursue their respective growth and tailored capital allocation plans.”

3M shareholders received one share of Solventum for every four shares of 3M stock they owned at market close on March 18. 3M also retained a 19.9% ​​stake in Solventum, although it said this will be monetized over the next five years when it sells it. out.

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Is this a win for 3M?

The healthcare spinoff may seem like a surprising move considering it has been the best-performing segment within 3M in recent quarters, but conglomerates have fallen out of fashion with investors in recent years. GE has been slimmed down. IBM turned off KyndrylAnd Johnson & Johnson divorced Kenvueits consumer products division.

Spinoffs give investors more choice and make it easier for managers to be held accountable because the financial results are simpler.

That’s not a silver bullet for 3M, but it could make it easier for the company to grow again. By bidding the stock higher and pushing Solventum lower, investors appear to be saying they prefer industrial 3M over the healthcare component.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions on and recommends Kenvue. The Motley Fool recommends 3M, International Business Machines, and Johnson & Johnson and recommends the following options: Long January 2026 calls $13 on Kenvue. The Motley Fool has a disclosure policy.

Why 3M Stock Went Higher Today was originally published by The Motley Fool

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