Jul 27, 2022 - Business

What 3M's health care spinoff could mean for Minnesota

3M's headquarters building
Photo: Michael Siluk/Education Images/Universal Images Group via Getty Images

3M Inc. announced Tuesday it will spin off its $8.6 billion health care business at the end of the 2023.

  • The health care business makes things like bandages and dental supplies. It accounts for about a quarter of the company's annual sales.

The intrigue: We don't yet know where the new, yet unnamed, company will be located. But the stakes are high — 3M employs 10,000 at its Maplewood headquarters and has been a major economic force in the east metro.

Between the lines: Whether or not the corporate workers stay in the Twin Cities could depend on what happens next, said Paul Vaaler, business and law professor at the University of Minnesota.

  • If the spun off company remains a stand-alone, publicly traded company, it's more likely to keep its headquarters here, he said.
  • But if it's being spun off just so it can be sold, its future in Minnesota would be more in doubt.
  • Vaaler pointed to 3M's spinoff of Imation back in 1996 as an example. That company kept its headquarters in Oakdale for about 20 years, but it moved about five years ago during financial struggles and restructuring.
  • "History doesn't repeat itself, but it often rhymes," Vaaler said.

Why it matters: A spun off health care business with $8.6 billion in sales would rank around 400 on this year's Fortune 500 list. Having a big stable of Fortune 500 companies has been important for the Twin Cities, Vaaler said.

  • "(Fortune 500 companies provide) philanthropy, research and development and higher incomes and education — the kind of things that really make for a better life," he said.
avatar

Get more local stories in your inbox with Axios Twin Cities.

🌱

Support local journalism by becoming a member.

Learn more

More Twin Cities stories

No stories could be found

Twin Citiespostcard

Get a free daily digest of the most important news in your backyard with Axios Twin Cities.

🌱

Support local journalism by becoming a member.

Learn more