Gemalto NV, a global digital security firm based in Amsterdam, The Netherlands, has agreed to purchase the identity management business of 3M Co. (NYSE: MMM) of St. Paul, Minnesota, for $850 million. The acquisition includes 3M Cogent Inc., which develops biometric products, such as fingerprint and iris scanners, used in civil identification, border control and law enforcement, and was purchased by 3M for $943 million in 2010. Gemalto's acquisition also includes 3M's document reader and secure materials businesses. The deal is expected to close in the first half of 2017.
"3M's identity management business and Gemalto perfectly fit, solving authentication and identity management pain points across our customer segments, creating immediate increased differentiation and offering additional long term growth perspectives", says Gemalto CEO Philippe Vallée.
3M, which makes Post-it Notes and Scotch tape, has reported lower sales for seven quarters running. The company has been boosting profits in part through a strategy of divestiture, like many consumer goods producers.
The deal arrives as companies that provide cybersecurity have become coveted targets for acquisition. Highlighting the need for cybersecurity has been an unprecedented wave of high-profile breaches in digital security, including: denial-of-service attacks on Internet tech provider Dyn, currently being acquired by Oracle Corp. (NYSE: ORCL); the announcement that 500 million Yahoo accounts had been hacked in 2014 in the midst of the struggling Internet's planned acquisition by Verizon Communications Inc. (NYSE: VZ); and the cyber-intrusions into the computers of the Democratic National Committee and other Democratic Party groups. On Dec. 9, President Barack Obama ordered the intelligence community to conduct a "full review" of "malicious cyber activity" timed to U.S. elections.
Hogan Lovells is representing 3M while Paul Hastings is doing the same for Gemalto.