Johnson & Johnson (J&J) is an American multinational corporation founded in 1886 that develops medical devices, pharmaceuticals, and consumer packaged goods. The company is splitting into two companies, separating the division that sells Band-Aids and Listerine, from its medical device and prescription drug business.
The company said in a statement that their division will be separated within 18 to 24 months.
The new consumer health company will house brands including Neutrogena, Aveeno, Tylenol, Listerine, Johnson's, and Band-Aid. They have not disclosed the name for the new company.
“This is a historic day for Johnson & Johnson, but this is something we’ve been looking at for years,” Chief Executive Officer Alex Gorsky said in an interview on Bloomberg Television. “Covid-19 we think also brought about a fundamental change about how people think about personal care.”
“Following a comprehensive review, the board and management team believe that the planned separation of the consumer health business is the best way to accelerate our efforts to serve patients, consumers, and healthcare professionals, create opportunities for our talented global team, drive profitable growth, and - most importantly - improve healthcare outcomes for people around the world,” CEO Alex Gorsky said in his statement.
J&J shares, part of the Dow Jones Industrial Average (DJI), were up 1.5%. The pharmaceutical and medical devices unit will retain the J&J name and the company expects a tax-free spinoff.
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Johnson & Johnson's Band-Aids baby shampoo and cough remedies have long been the face of the company. The corporation includes some 250 subsidiary companies with operations in 60 countries and products sold in over 175 countries. Johnson & Johnson had worldwide sales of $82.6 billion during the calendar year 2020.
The move by the world’s largest health-products company comes hot on the heels of similar announcements this week by industrial conglomerates Toshiba and General Electric and underscores how big, diversified corporations are under pressure to simplify.