3M Drops Avery Dennison Unit Buyout Amid Antitrust Worry

3M Co. dropped its $550 million takeover of Avery Dennison Corp.’s office-products unit after the U.S. Justice Department said it would sue if the companies didn’t abandon the transaction.

The Justice Department said in an e-mailed statement that the merger would have given 3M more than 80 percent of the U.S. market for labels and sticky notes. The department’s investigation found that 3M and Avery have dominated adjacent parts of the office products business for many years, with Avery making labels and 3M selling sticky notes under its Post-it brand.