The move came after the U.S. Department of Justice said it would block the $550 million deal over anti-trust concerns back in September, Reuters noted.
Shares of Avery Dennison fell almost 5% in early Thursday trading, while 3M shares moved up fractionally.
Regulators claimed that the merger would have reduced competition relating to the sale of office products, especially sticky notes and labels, resulting in higher prices for consumers. The government said it would sue to stop the combination.
Initially, 3M officials said they would contest the government’s action and were hoping to restructure the purchase in order to gain approval.
3M is moving forward with its $860 million purchase of Ceradyne, a producer of industrial ceramics.
Avery Dennison said it remains committed to selling its consumer products business.