(Businesshala) – Johnson & Johnson plans to split into two companies, separating its consumer health division from band-aids from its pharmaceuticals and medical devices businesses in the biggest shake-up in its 135-year history. and sells baby powder.
The move by the world’s largest health-products company comes hot on the heels of similar announcements this week by industrial conglomerate Toshiba and General Electric and underscores how big, diverse corporations are under pressure to simplify .
This has been the case in the healthcare sector, where the slow and stagnant business of selling consumer products such as moisturizers and shampoos has rapidly diverged from the high-risk, high-reward work of developing and marketing drugs.
Johnson & Johnson said it would separate its consumer health business into a new publicly traded company, echoing a move by rivals GlaxoSmithKline plc and Pfizer Inc., to wind up their combined consumer health business next year. is planning to do.
Germany’s Merck KGaA sold its consumer health unit to Procter & Gamble Company in 2018.
“The new Johnson & Johnson and the new consumer health company will be able to more effectively allocate resources, drive growth and unlock significant value for patients and consumers,” said Joaquin Duato. January.
The company is aiming to complete the planned separation in 18 to 24 months, sending its shares up 4% before the bell.
Johnson & Johnson will retain its pharmaceuticals and medical device units, which sell its COVID-19 vaccine, cancer-treating drugs such as Darzalex and medical devices. The units are expected to generate approximately $77 billion in revenue in 2021.