3M abandons acquisition bid under Justice pressure
WASHINGTON (AP) — Office products giant 3M Co. has abandoned its plan to acquire its closest competitor in the sale of adhesive-backed labels and sticky notes, the Justice Department said Tuesday, attributing the move to a threatened civil antitrust lawsuit by the agency.
The department said that 3M's proposed acquisition of Avery Dennison Corp.'s Office and Consumer Products Group, which includes Avery's label business, would have substantially lessened competition in the sale of labels and sticky notes, resulting in higher prices and reduced innovation. 3M and Avery agreed last December that 3M would acquire Avery Dennison's office products group for $550 million.
The proposed merger would have given 3M, maker of Post-It sticky notes, more than 80 percent of the U.S. business in both labels and sticky notes.
The department's investigation found that 3M, based in St. Paul, Minn., and Avery, based in Pasadena, Calif., have dominated those areas of the office products business for many years — Avery in labels and 3M in sticky notes. But 3M entered the labels market in 2009 and began competing with Avery. Avery responded by selling its own brand of sticky notes.