One of the world’s biggest health and pharma companies will be split in two.
Johnson & Johnson plans to spin its consumer brands off into a new company, while a company retaining the Johnson & Johnson name would focus on vaccines, pharmaceuticals and medical devices. Both entities would remain publicly traded.
The to-be-named consumer company would contain brands like Tylenol, Listerine, Band-Aid, Neutrogena, Aveeno, Benadryl, Visine and many more.
It would also include Johnson’s Baby Powder, currently the subject of lawsuits claiming it caused cancer and other health problems, claims the company has denied. On Wednesday, a judge ruled a stay in some of the lawsuits after Johnson & Johnson created a new subsidiary that assumed responsibility for the lawsuits, which then declared bankruptcy.
The company said the split is to offer more agility and opportunities for capital allocation to the consumer brands, as well as separate from a pharma business that has higher margins but faces more volatility and uncertainty. The consumer products division is expected to reach $15 billion in global sales this year, while the rest of the business is expecting $77 billion.
The transaction is expected to take 18 to 24 months to complete and is subject to approval by the company’s board.
