Acquisitions

9 Months Ended

Sep. 30, 2012

Acquisitions

Acquisitions

NOTE 2. Acquisitions

3M makes acquisitions of certain businesses from time to time that the Company feels align with its strategic intent with respect to, among other factors, growth markets and adjacent product lines or technologies.Goodwill resulting from business combinations is largely attributable to the existing workforce of the acquired businesses and synergies expected to arise after 3M's acquisition of these businesses. In addition to business combinations, 3M periodically acquires certain tangible and/or intangible assets and purchases interests in certain enterprises that do not otherwise qualify for accounting as business combinations. These transactions are largely reflected as additional asset purchase and investment activity.

During the nine months ended September 30, 2012, the purchase price paid for business combinations (net of cash acquired)aggregated to $248 million.The allocations of purchase price related to the acquisitions of CodeRyte, Inc. in April 2012 and the business purchased from Federal Signal Corp. in September 2012 are considered preliminary, largely with respect to tax-related items and certain other assets and liabilities. Adjustments in the first nine months of 2012 to the preliminary purchase price allocations of other acquisitions within the allocation period were not material and primarily related to the 2011acquisitions of Winterthur Technologie AG and the business acquired from GPI Group. Refer to Note 2 in 3M's 2011Annual Report on Form 10-K for more information on 3M's2011acquisitions.

In April 2012, 3M (Health Care Business) purchased all of the outstanding shares ofCodeRyte, Inc.,an industry leader in clinical natural processing technology and computer-assisted coding solutions for healthcare outpatient providers, which is headquartered in Bethesda, Maryland.

In September 2012, 3M (Display and Graphics Business) purchased the net assets of Federal Signal Technologies Group from Federal Signal Corp., for a total purchase price of approximately $104 million. This business focuses on electronic toll collection and parking management hardware and software services, with primary facilities spread throughout the United States and in the U.K.

For acquisitions which closed in the first nine months of 2012, purchased identifiable finite-lived intangible assets totaled $95 million. These assets will be amortized on a straight-line basis over a weighted-average life of 12 years (lives ranging from 2 to 15 years). Acquired in-process research and development and identifiable intangible assets for which significant assumed renewals or extensions of underlying arrangements impacted the determination of their useful lives were not material. Pro forma information related to acquisitions was not included because the impact on the Company's consolidated results of operations was not considered to be material.

In December 2011, 3M (Consumer and Office Business) entered into a definitive agreement to acquire the Office and Consumer Products business of Avery Dennison Corp. (Avery).3M and Avery withdrew from the regulatory approval process for this acquisition in September 2012 and subsequently announced that they had terminated this agreement in October 2012.

In October 2012, 3M (Industrial and Transportation Business) announced that it had entered into a definitive agreement to acquireCeradyne, Inc. (Ceradyne) and commenced its cash tender offer for all outstanding shares of Ceradyne at a price of $35.00 per share. The tender offer is scheduled to expire on November 27, 2012, unless extended. The proposed transaction has an aggregate value of approximately $860 million, or approximately $670 million net of cash, cash equivalents, short-term investments and debt.Ceradyne, headquartered in Costa Mesa, California, is involved in the development and production of advanced technical ceramics for demanding applications in the automotive, oil and gas, solar, industrial, electronics and defense industries. The transaction is expected to be completed in the fourth quarter of 2012, subject to customary closing conditions including any necessary regulatory approvals.