Johnson & Johnson to spin off consumer healthcare division

By Becky Bargh | Published: 15-Nov-2021

Split will see the healthcare Goliath focus specifically on its beauty and consumer brands

Johnson & Johnson (J&J) has laid out plans to separate its Consumer Health business, which includes personal care brands Neutrogena and Aveeno, as a new publicly listed company.

The decision, J&J said, will allow its consumer business to deliver better innovation and accelerate growth for its brands.

Listerine, Tylenol and Johnson’s own-brand products also make up J&J’s consumer division.

Directors and executive leadership of the new Consumer Health company are yet to be announced, however, J&J will continue with its transition of Joaquin Duato, currently J&J’s Vice Chairman of its Executive Committee, to CEO, away from Alex Gorsky in the new year.

Speaking about the plans, Gorsky said that the severing of its business will give more opportunity for innovation in the digital device space.

“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,” he said.

“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.”

Duato continued: “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.”

The move follows J&J’s controversial decision last month, which saw the business’ newly created subsidiary that manages claims in cosmetic talc litigation – of which there have been many – file for Chapter 11 bankruptcy.

According to J&J, the move is said to resolve all claims related to its own-brand talc products.

The business had attracted criticism amid rumours that it would be offloading its liabilities into bankruptcy prior to the announcement.

But J&J has insisted that it will provide funding to the subsidiary, LTL Management, for payments decided by the Bankruptcy Court in the form of a US$2bn trust.

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