3M expands Amazon data center partnership, shares gain
3M expands Amazon data center partnership, shares gain Oct 19 (Reuters) - Industrial conglomerate 3M MMM.N said on Monday it was expanding its commercial relationship with Amazon AMZN.O and had issued a warrant to an Amazon subsidiary, allowing it the right to buy 3M common stock worth over $521 million.
Shares of 3M were up more than 5% in extended trading after the announcement.
Here are more details:
3M said it has issued a warrant to a wholly owned Amazon subsidiary, giving it the right to purchase up to 3.16 million 3M shares over the next seven years at $164.89 per share
The agreement expands 3M's commercial relationship with the e-commerce major at a time major technology companies are increasing spending on data-center infrastructure to support AI and cloud-computing growth
3M said about 85% of the warrant shares will become available as Amazon buys optical connectivity and other data-center products from 3M, with that portion becoming fully vested once total purchases hit $6 billion
The remaining 15% of the shares will vest once certain milestone-based conditions are met
In July, Microsoft became the first hyperscaler to adopt 3M's Expanded Beam Optics technology in AI data centers
(Reporting by Apratim Sarkar in Bengaluru; Editing by Diti Pujara)
((Apratim.Sarkar@thomsonreuters.com;))