NOTE 2. Acquisitions and Divestitures

Acquisitions:

3M makes acquisitions of certain businesses from time to time that are aligned with its strategic intent with respect to, among other factors, growth markets and adjacent product lines or technologies.

There were no business combinations that closed during the three months ended March 31, 2017.

In March 2017, 3M (Safety and Graphics Business) announced that it entered into an agreement to acquire Scott Safety, which is headquartered in Monroe, North Carolina, from Johnson Controls for $2.0 billion, subject to closing and other adjustments. Scott Safety is a premier manufacturer of innovative products, including self-contained breathing apparatus systems, gas and flame detection instruments, and other safety devices that complement 3M’s personal safety portfolio. The business had revenues of approximately $570 million in 2016. The transaction is expected to close in the second half of 2017, subject to customary closing conditions, regulatory approvals, and information or consultation requirements with relevant works councils.

Divestitures:

3M may divest certain businesses from time to time based upon reviews of the Company’s portfolio considering, among other items, factors relative to the extent of strategic and technological alignment and optimization of capital deployment, in addition to considering if selling the businesses results in the greatest value creation for the Company and for shareholders.

In January 2017, 3M (Safety and Graphics Business) sold the assets of its safety prescription eyewear business, with annual sales of approximately $45 million, to HOYA Vision Care. The Company recorded a pre-tax gain of $29 million in the first quarter of 2017 as a result of this sale (recorded in selling, general and administrative expenses).

In December 2016, 3M (Safety and Graphics Business) agreed to sell its identity management business to Gemalto N.V. for $850 million, subject to closing and other adjustments. In May 2017, 3M completed the related sale or transfer of control, as applicable. This business, with 2016 sales of approximately $205 million, is a leading provider in identity management solutions, including biometric hardware and software that enable identity verification and authentication, as well as secure materials and document readers. The Company expects a pre-tax gain of approximately $470 million as a result of this divestiture.

The aggregate operating income of these two businesses was less than $20 million in each of 2016 and 2015. The approximate amounts of major assets and liabilities associated with disposal groups classified as held-for-sale as of March 31, 2017 and December 31, 2016 included the following:


	March 31,		December 31,
(Millions)	2017		2016
Accounts receivable	$	25	$	25
Property, plant and equipment (net)		20		25
Intangible assets		25		35
Deferred revenue (other current liabilities)		30		35

In addition, approximately $250 million and $270 million of goodwill was estimated to be attributable to disposal groups classified as held-for-sale as of March 31, 2017 and December 31, 2016, respectively, based upon relative fair value. The amounts above have not been segregated and are classified within the existing corresponding line items on the Company’s consolidated balance sheet.

Refer to Note 2 in 3M’s 2016 Annual Report on Form 10-K for more information on 3M’s acquisitions and divestitures.