April 30 (Reuters) – Nelson Peltz’s Trian Fund Management on Thursday called on Solventum to rightsize overhead costs, divest non-core businesses and improve capital allocation in its latest appeal for a performance turnaround at the medical device maker.
Over the last 18 months, Trian, which owns nearly 5% of Solventum’s stock, has urged it to restore its performance, arguing that the company’s spin-out from 3M has been managed in a way that has maximized executive compensation, not shareholder value.
“We have given the company plenty of time to announce what we believe are obvious value-creation initiatives, but our patience has run out,” the investment firm said in its letter.
Trian suggested that Solventum should reinvest in growth in order to reach and exceed performance levels it delivered inside 3M, as well as simplify its portfolio starting with the immediate separation of the health information systems business.
Solventum would be a considerably more valuable company if the board and management team are willing to take appropriate steps to realize its potential, Trian said.
Solventum argued that in two years as a standalone company, it has “taken decisive actions, including the $4 billion sale of our purification and filtration business, significant debt reduction, the launch of a $1 billion share repurchase program, and are executing a $500 million Transform for the Future cost savings program.”
Its board and management team have engaged “constructively and continuously” with Trian, a spokesperson of the company told Reuters in its statement.
(Reporting by Sriparna Roy and Sneha S K in Bengaluru; Editing by Shreya Biswas and Shilpi Majumdar)
