3M Co. (MMM) on Tuesday, Dec. 14, said it agreed to separate its food safety business and combine it with Neogen Corp. (NEOG) in a deal that values the combined company at $9.3 billion.

Neogen is paying $1 billion to 3M to acquire the food safety business, valuing the latter at $5.3 billion, including debt. The buyer’s shareholders will own 49.9% of the combined company, while 3M shareholders will own 50.1% after the close of the transaction.

The deal, which is structured to be tax-efficient to 3M and its shareholders, is expected to close in the third quarter of 2022, according to a statement from Neogen on Tuesday.

Neogen’s management will lead the combined company, while the buyer’s board will expand to include two new independent directors to be designated by St. Paul, Minn.-based 3M.

The combined company is expected to generate $1 billion in pro forma revenue and $300 million in pro forma Ebitda in the first full year after close.

Neogen stock was up 6.17% at $42.6 per share Tuesday morning while 3M shares were up 0.89% at $176.04 apiece.

Neogen looked to…

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