- 3M chairman of the board and CEO Mike Roman went on Bloomberg to discuss the company’s acquisition goals. Here’s what he said.
3M chairman of the board and chief executive officer Mike Roman recently went on Bloomberg to discuss the company’s acquisition goals. Despite going through one of the most challenging years in company history, 3M does not plan to slow down in terms of acquisitions.
Roman cited the $4.4 billion acquisition of bandage company Acelity this year. This was considered one of 3M’s largest deals ever.
“We do see an opportunity in our portfolio to make acquisitions,” said Romain during the interview in reference to the company becoming aggressive in dealmaking. “We’ve been stepping up into a little bigger acquisitions.”
3M needs to make some bold moves in order to glide through an economy where the auto market is slowing down and there is a volatile trade war with China. This past year, Roman has had to cut earnings expectations multiple times since he took the CEO role.
Roman also pointed out that market conditions have declined more rapidly than expected at the beginning of the year. And as a supplier to many companies, 3M typically gets hit by bearish economic conditions first.
“We’ve led into slowdowns — in 2008 and ‘09, the oil and gas slowdown — we saw those early and we know how to adjust,” added Roman. But he pointed out that when the automotive and electronics sectors record, 3M “will lead out.”
In order to adapt to an economic downturn, it takes around 90 days. And 3M already had layoffs and an organizational restructuring this year. However, he believes that 3M should be well-positioned next year.
For example, 3M is investing more in R&D and is considering ways to realign its portfolio. Last week, 3M sold its drug delivery business for around $650 million.
“We think about which parts don’t leverage the synergies so well anymore and we have made divestitures where it makes sense,” Roman explained. “That portfolio priority is very important for me. How I think about leading change in the company is managing our portfolio.”
