Johnson & Johnson Announced Friday that it Plans to Split its Consumer Products Division from its Pharmaceutical and Medical Device Business
Nov 12, 2021 By MarketDepth
Johnson & Johnson (NYSE: JNJ) announced Friday that it plans to split its consumer products division from its pharmaceutical and medical device business, by creating separate publicly traded companies for each. Similarly, other companies such as Toshiba and General Electric have made similar announcements, as corporations receive pressure to simplify.
Separating Businesses
The parting will separate J&J’s household products unit, maker of Band-Aid bandages, Aveeno and Neutrogena skin care products, and Listerine from its other expanding unit, which produces a Covid-19 vaccine as well as drugs and medical devices.
“Following a comprehensive review, the board and management team believe that the planned separation of the consumer health business is the best way to accelerate our efforts to serve patients, consumers, and healthcare professionals, create opportunities for our talented global team, drive profitable growth, and – most importantly – improve healthcare outcomes for people around the world.”
outgoing CEO Alex Gorsky
According to the company, the split will be finalized within 18 to 24 months. Shares rose 4% before the bell upon the news.
Name not Decided
Gorsky disclosed that the company had yet to determine a name for the new publicly traded corporation. He mentioned that the board had discussed the matter of splitting the companies for “some time” as it would provide “tremendous opportunity” to stakeholders.
Positive for Shareholders
“It’s in the best long-term interest of all our stakeholders,” he said on “Squawk Box.” “Our goal is really to create two global leaders – a pharmaceutical and medical device business that has great potential today … and of course, the consumer business that’s got iconic brands.”
