3M to Acquire the Office and Consumer Products Business of Avery Dennison Corp.

ST. PAUL, Minn.--(BUSINESS WIRE)--3M announced today that it has entered into a definitive agreement to acquire the Office and Consumer Products business (“OCP”) of Avery Dennison Corp. for a total purchase price of $550 million in cash, subject to post-closing adjustments.

“This acquisition complements our global business, which includes our iconic Post-it and Scotch brands, and will allow us to better serve our customers with accelerated product innovation”

The Office and Consumer Products business of Avery Dennison is one of the world’s leading suppliers of office and education products, including labels, binders, presentation products, filing and indexing products, writing instruments, and other office and home organization products. OCP also includes the Avery®, HI-LITERS®,and Marks-A-Lot® brands in the U.S., Canada, Germany, France, United Kingdom, Australia, New Zealand, and several other countries. Sales in 2011 are estimated to be $765 million with EBITDA of $95 million.

Adding OCP will increase 3M’s scale and broaden its global presence in office, education and consumer products. The combined business will continue to invest in product innovation, category management and business and supply chain analytics, to provide retailers and consumers with superior products and shopping experiences.

“This acquisition complements our global business, which includes our iconic Post-it and Scotch brands, and will allow us to better serve our customers with accelerated product innovation,” said Bill Smith, vice president and general manager, 3M Office Supplies Division. “In addition, OCP will build on 3M’s strong and long-standing customer partnerships worldwide.”

On a GAAP-reported basis, 3M estimates the acquisition will be approximately $0.06 dilutive to earnings per share in the first 12 months following closing. Excluding purchase accounting adjustments and anticipated integration expenses, 3M estimates the acquisition will be $0.03 accretive to earnings over the same period.

OCP is headquartered in Brea, Calif., and employs approximately 3000 people globally. The transaction is expected to be completed in the second half of 2012, subject to customary closing conditions including any necessary regulatory approvals.

Forward-Looking Statements

This news release contains forward-looking information about 3M’s financial results and estimates and business prospects that involve substantial risks and uncertainties. You can identify these statements by the use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will,” “target,” “forecast” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or business plans or prospects. Among the factors that could cause actual results to differ materially are the following: (1) an unforeseen delay or inability to consummate the OCP acquisition; (2) worldwide economic and capital markets conditions and other factors beyond 3M’s control, including natural and other disasters affecting the operations of 3M or its customers; (3) 3M’s credit ratings and its cost of capital; (4) competitive conditions and customer preferences; (5) foreign currency exchange rates and fluctuations in those rates; (6) the timing and acceptance of new product offerings; (7) the availability and cost of purchased components, compounds, raw materials and energy (including oil and natural gas and their derivatives) due to shortages, increased demand or supply interruptions (including those caused by natural and other disasters and other events); (8) the impact of acquisitions, strategic alliances, divestitures, and other unusual events resulting from portfolio management actions and other evolving business strategies, and possible organizational restructuring; (9) generating fewer productivity improvements than estimated; and (10) legal proceedings, including significant developments that could occur in the legal and regulatory proceedings described in 3M’s Annual Report on Form 10-K for the year ended December 31, 2010 and its subsequent quarterly reports on Form 10-Q (the “Reports”). Changes in such assumptions or factors could produce significantly different results. A further description of these factors is located in the Reports under “Cautionary Note Concerning Factors That May Affect Future Results” and “Risk Factors” in Part I, Items 1 and 1A (Annual Report) and in Part I, Item 2 and Part II, Item 1A (Quarterly Report). The information contained in this news release is as of the date indicated. 3M assumes no obligation to update any forward-looking statements contained in this news release as a result of new information or future events or developments.

About 3M

3M captures the spark of new ideas and transforms them into thousands of ingenious products. Our culture of creative collaboration inspires a never-ending stream of powerful technologies that make life better. 3M is the innovation company that never stops inventing. With $27 billion in sales, 3M employs about 80,000 people worldwide and has operations in more than 65 countries. For more information, visit www.3M.com or follow @3MNews on Twitter.

Avery, HI-LITERS,and Marks-A-Lot are trademarks of Avery Dennison Corp.

Post-it and Scotch are trademarks of 3M.