WASHINGTON (Legal Newsline) - Fortune 100 company 3M of Minnesota backed away from its acquisition of Avery Dennison Corp.'s Office and Consumer Products Group after the Department of Justice said it would file an antitrust lawsuit to block the deal.
Avery is 3M's biggest competitor in the sale of adhesive-backed labels and sticky notes market.
The DOJ said that the proposed acquisition would have hurt competition in the sale of labels and sticky notes. This would result in higher prices and reduced innovation, it said.
3M and Avery announced in December that 3M would acquire Avery's Office and Consumer Products Group, which includes Avery's labels business, for approximately $550 million. The agreement specifically excluded some sticky notes assets, but left Avery without its brand or the sales and distribution system necessary to compete effectively in the sticky notes market, the DOJ said.
"We welcome the companies' decision to abandon this deal, which raised competitive concerns in the sale of labels and sticky notes," said Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice's Antitrust Division
DOJ said that the proposed merger would have given 3M more than an 80 percent share of both the U.S. labels and sticky notes markets. 3M had said the deal would give it a larger presence in the office-supply industry since Avery's office business unit is a leading supplier of labels, binders and filing products.