Evaluation of Merger
One company may acquire another for a number of different reasons. The acquisition often has a significant impact on the financial statements. In 2005, 3M Corporation acquired CUNO Incorporated. Obtain a copy of the 3M 10-K filing for 2005. The 10-K reports the annual results for a company and is often available on the Investor Relations section of a company’s website. It is also available on the SEC’s website at www.SEC.gov.
Required
Use the 10-K for 2005 to find the answers to the following questions about 3M’s acquisition of CUNO Inc.
(Hint: You can search for the term CUNO once you have accessed the 10-K online.)
a. Provide at least one reason why 3M acquired CUNO.
b. How was the acquisition funded?
c. What was the impact of the CUNO acquisition on net accounts receivable?
d. What was the impact of the CUNO acquisition on inventories?
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