3M Looks To Sell Food Safety Business For $3.5B: Bloomberg

3M Co MMM is exploring a sale of its food safety business division for $3.5 billion, reports Bloomberg.

What Happened: The post-it notes manufacturer's food safety division makes test kits for food makers to monitor sanitation and allergens. The company could rake in $3.5 billion by selling its business to raise cash as pandemic has hit the food and restaurant industry.

3M could still opt to retain its business as a final decision has not been made, according to Bloomberg.

Why It Matters: Coronavirus has sent ripples across industries and 3M is no exception. As the company grapples with the grim business situation, raising cash during the pandemic helps it stabilize.

3M reported a 12.2% decline in second-quarter revenue and the company didn't provide guidance as the full impact of the pandemic was not known.

Earlier this month, 3M issued guidance for third-quarter revenue of $8.2 billion to $8.3 billion, in-line with analyst expectations.

Credit Suisse has maintained an Outperform rating on 3M with a price target of $197 on Sep. 16.

Benzinga's Take: The food safety business generated $341 million in revenue last year — representing approximately 5% of the overall health care unit, according to Bloomberg. In such a scenario, parting away with the small portion of revenue to raise cash makes sense for 3M.

Price Action: 3M shares closed 0.61% higher to $162.34 on Tuesday. The stock is down 8% year-to-date lagging behind the S&P Industrial index, which is down 5.8%.