The world's largest health-products company by sales revealed earlier today that it plans to split the consumer health division from the pharmaceuticals unit. After the split, the consumer health business will become a new publicly traded company.
Joaquin Duato, J&J's CEO starting January 2022, stated: "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."
Despite the split, the company plans to keep its total dividend "at least at the same level" – 2.6%.
The business separation is expected to be complete in 18 to 24 months. J&J will keep the pharmaceuticals and medical device units, expected to generate roughly $77 billion in revenue in 2021.
J&J is the second US company this week that announces a split, after General Electric. After the news hit the wires, Johnson & Johnson stock price added 4% before the opening bell.
Sources: reuters.com, wsj.com