Healthcare giant Johnson & Johnson to spin off consumer health business
Johnson & Johnson (JNJ) has announced plans to carve out its consumer health business into a new publicly traded company to focus on its biopharma and medical device businesses.
According to the US healthcare conglomerate, the move will create two global majors that are better placed to deliver enhanced health outcomes for patients and consumers, for pursuing more targeted business strategies and expediting growth.
After the planned separation, the new Johnson & Johnson will continue to be the largest and most diverse healthcare firm in the world, claimed the conglomerate.
The new consumer health company will own well-known brands like Neutrogena, Tylenol, Aveeno, Band-Aid, Listerine, and Johnson’s.
With effect from 3 January 2022, Alex Gorsky will be the executive chairman of Johnson & Johnson and transition the CEO post to Joaquin Duato, who is presently vice chairman of the firm’s executive committee.
Joaquin Duato will continue to head the new Johnson & Johnson after the completion of the planned spin-off.
Healthcare giant Johnson & Johnson to spin off consumer health business. Photo courtesy of Ekem/Wikipedia.org.
Alex Gorsky said: “For the new Johnson & Johnson, this planned separation underscores our focus on delivering industry-leading biopharmaceutical and medical device innovation and technology with the goal of bringing new solutions to market for patients and healthcare systems, while creating sustainable value for shareholders.
“We believe that the New Consumer Health Company would be a global leader across attractive and growing consumer health categories, and a streamlined and targeted corporate structure would provide it with the agility and flexibility to grow its iconic portfolio of brands and innovate new products.”
Johnson & Johnson said that the move is likely to generate value for all stakeholders. For this, the group will aim to achieve goals such as boost management focus, resources as well as agility and speed to effectively address differing industry trends and to better meet the requirements of the two independent firms.
Capital allocation will be further focused based on the goals of each standalone company. The group will aim to give each company a compelling financial profile, while aligning corporate and operational structures so that the two entities are better able to fuel growth and value creation.
The new Johnson & Johnson company will continue to consolidate on its offering of life-saving treatments which include Darzalex, Imbruvica, Erleada, Tremfya, Stelara and medical device solutions across interventional solutions, surgery, orthopaedics, and vision.
Joaquin Duato said: “This planned transaction would create two businesses that are each financially strong and leaders in their respective industries. We believe that the new Johnson & Johnson and the New Consumer Health Company would each be able to more effectively allocate resources to deliver for patients and consumers, drive growth and unlock significant value.
“Importantly, the new Johnson & Johnson and the New Consumer Health Company would remain mission driven companies with exceptional brands, commitments to innovation, and remarkable talent.”
Johnson & Johnson said that the organizational design planned for the new consumer health company is anticipated to be wrapped up by the end of next year. It will be contingent on legal requirements such as consultation with works councils and employee representatives, as needed.