J&J to hold 9.5% stake in consumer health spinoff Kenvue following share exchange

By Julia Wray | 21-Aug-2023

The multinational launched the exchange offer in July in a bid to take its hands off the Kenvue reins

Johnson & Johnson (J&J) is retaining a stake of around 9.5% in its consumer health unit Kenvue, after completing an oversubscribed share exchange offer. 

The healthcare giant launched the exchange offer in July in a bid to take its hands off the Kenvue reins. 

Under the exchange offer, J&J shareholders could exchange all, some or none of their common stock for Kenvue shares, tax-free. 

According to J&J’s preliminary results, when the exchange offer expired 18 August, shareholders had validly tendered 802.7 million shares of J&J common stock. 

With the offer oversubscribed, the company is accepting only a portion of the tendered shares on a pro rata basis, not applicable to those with fewer than 100 shares. 

J&J estimates that about 23.8% of the tendered shares of its common stock will be exchanged. 

The US multinational first unveiled Kenvue in September 2022, following the announcement that it intended to separate its consumer health division into a new publicly listed company the year before. 

In May, Kenvue was valued at around US$41bn in an IPO – the largest IPO in any industry since 2021 – after which J&J still owned 90% of the company. 

When the exchange offer for the separation of Kenvue was announced on 24 July, J&J said the move would allow it to focus on its core businesses. 

“The separation of Kenvue further sharpens Johnson & Johnson’s focus on transformational innovation specifically in pharmaceutical and med-tech,” said J&J’s Chairman and CEO, Joaquin Duato, at the time. 

“We believe now is the right time to distribute our Kenvue shares and we are confident that a split-off is the appropriate path forward to bring value to our shareholders.”

Kenvue’s product portfolio includes the Aveeno, Neutrogena, Johnson’s and Dr.Ci:Labo brands.

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