The Merger of Neogen’s Food Safety Business With 3M Is Completed

Neogen Corporation NASDAQ:NEOG

Neogen Corporation (NASDAQ:NEOG)

The merger between Neogen Corporation (NASDAQ:NEOG) and 3M Company’s (NYSE:MMM) Food Safety business, is announced to be finalized. This merger is predicted to establish an innovative leader in the food safety industry with a comprehensive product range and a strategic emphasis on the category’s long-term growth possibilities.

Food Safety, a former 3M division, is now a leading inspection and analysis equipment and services provider. To assist numerous sectors within food and beverage, the firm offers a comprehensive range of food safety testing solutions that help manufacturers battle and shield consumers from foodborne diseases. In addition, the company has built a sizable international profile, with products sold in more than 60 countries and a broad customer base numbering over 100,000.

As a result of merging their respective Food Safety divisions, 3M and Neogen Corporation (NASDAQ:NEOG) have created a market leader with expanded reach, cutting-edge products, digital prowess, and financial pliability. The combination would take advantage of the strong growth trends within sustainability, food safety, and supply chain integrity.

Terms of the Merger

Under the terms of the definitive agreements, existing Neogen Corporation (NASDAQ:NEOG) shareholders will keep roughly 49.9 percent of the combined company and benefit from a tax-free “Reverse Morris Trust” structure. 3M shareholders would reportedly own about 50.1% of the new company. According to the merger agreement’s terms, two new Directors will be added to Neogen’s Board of Directors shortly after the merger’s close.

Per Neogen’s management, both firms are strongly committed to being a leader in the invention of food and animal safety solutions. The merger will strengthen Neogen’s position as a global leader in innovation and help it become a forerunner in food safety and digitization.

Prospects in an Industry

Per research by MarketsandMarkets, the food safety testing market is predicted to exhibit a CAGR of 7.9% during 2021-2026. Market expansion may be attributed to factors such as the increased demand for convenience and packaged food items and the rising prevalence of foodborne diseases caused by the ingestion of food contaminated with mycotoxin, pathogens, yeasts, and molds.

Neogen Corporation’s (NASDAQ:NEOG) acquisition of 3 M’s Food Safety division appears wise in light of the company’s future prospects in the market.

Some Other Major Changes

Thai-Neo Biotech Co., Ltd. was a distributor of Neogen Corporation (NASDAQ:NEOG) food safety products in Bangkok, Thailand, and in July 2022, Neogen purchased the company. Neogen’s existing operations in India, China, and Australia will be strengthened by this purchase, giving the company more significant exposure to the rapidly developing Asia/Pacific food safety market. The specifics of the deal, however, remain secret.

Health Canada’s Natural and Non-Prescription Health Products Directorate Branch gave the company the green light to sell Neogen Viroxide Super nationwide in June 2022. The new biosecurity solution can prevent the spread of dangerous pathogens like COVID-19 and avian flu, which have significant economic impacts. As part of a larger biosecurity plan, it enables fast, broad-spectrum disinfection.

Neogen Corporation’s (NASDAQ:NEOG) stock’s performance in the past year has lagged below its sector’s. Shares of the firm are down 58.5% compared to the market’s drop of 51.8%.

Featured Image-  Megapixl @Rafaelhenriquepress

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About the author: I'm a financial journalist with more than 1.5 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.