Healthcare giant Johnson & Johnson is separating into two companies, one to focus on consumer products and another to handle its pharmaceuticals and medical devices.
The move comes as the company continues to grow and has gained worldwide attention for its single-shot COVID-19 vaccine.
The pharmaceutical and medical device wing of the company will retain the Johnson & Johnson name and will be helmed by the corporation’s incoming CEO, Joaquin Duato.
The consumer health company — producing products like Tylenol, Neutrogena, and Listerine — has not yet been named. A chief executive has not been announced for the new company.
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“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,” said outgoing CEO Alex Gorsky.
The company said in a news release the divorce will allow increased management focus on differing industry trends and better capital allocation for each company’s individual objectives.
Goldman Sachs and JP Morgan will act as advisers to Johnson & Johnson as it splits, a process the company predicts will finish within two years.
“This planned transaction would create two businesses that are each financially strong and leaders in their respective industries,” said Duato, who will take over as CEO in January and will help guide the split. “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.”
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Johnson & Johnson’s stock went up on Friday morning following news of the division.
General Electric also announced it would split its company this week, with one division focusing on energy, one on aviation, and another on healthcare.
