By Ben Glickman
Activist investor Trian Fund Management plans to push Solventum to separate more of its businesses after the company's $4.1 billion deal to sell its filtration unit, according to people familiar with the matter.
The details
Nelson Peltz's firm has held a roughly 5% stake in Solventum since the middle of last year. Solventum, which sells healthcare products, was spun out from 3M in April 2024.
Trian believes the company should separate its dental products and software businesses and focus more on its medical and surgical unit, the people said. The firm wants Solventum management to slash costs in its businesses before a potential sale or spinoff.
Solventum had said Tuesday it agreed to sell its purification and filtration unit to Thermo Fisher Scientific. Executives have said previously that the company was working on fine-tuning its portfolio, including by getting out of businesses that didn't fit its strategy.
Trian plans to release a statement Wednesday hailing the deal as a step in the right direction, the people said.
Trian will say the deal appeared to validate its belief that Solventum's costs are too high, weighing on profits, according to people familiar with the matter. In its release, Thermo Fisher said the deal would result in cost savings from day one.
A Solventum spokesperson noted the company's progress transforming itself and said it would continue to create value for shareholders.
The context
Trian had said in an open letter to Solventum shareholders in January that selling noncore businesses would allow the company to pay down debt and invest in growth.
Trian has pointed out that the company's margins and organic sales growth have stalled after its spinoff from 3M. Typically, spun-off businesses are expected to grow faster as stand-alone companies.
Trian, founded by Peltz and Peter May in 2005, is coming off a bruising proxy battle at Disney last year. The firm pushed for board seats at the entertainment giant, but lost a shareholder vote.
Solventum is set to report fourth-quarter results Thursday and has scheduled an investor day for next month.
Write to Ben Glickman at ben.glickman@wsj.com
(END) Dow Jones Newswires
February 26, 2025 15:29 ET (20:29 GMT)
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