Johnson & Johnson (J&J) announced on Friday Press release The company plans to split its healthcare and consumer health divisions into separate companies.
The name of the “New Consumer Health Company” has not yet been announced. Johnson & Johnson (J&J) CEO Alex Gorsky (Alex Gorsky) will transfer the position of CEO to Joaquin Duato on January 3, 2022, but will still serve as the company’s executive chairman. Gorski has served as CEO and Chairman since 2012.
He commented on the split: “After a comprehensive review, the board of directors and the management team believe that the planned separation of consumer health services is the best way to accelerate our efforts to serve patients, consumers, and healthcare professionals. Talented people create opportunities for global teams, drive profitable growth, and-most importantly-improve health care outcomes for people around the world.”
Johnson & Johnson believes that the split will increase management focus, resources, agility and speed to respond to different industry trends and better meet consumer needs. The current company has annual sales of US$15 billion and will focus on prescription drugs and medical equipment, including the research and development of Johnson & Johnson’s Covid-19 vaccine and advanced technologies such as robotics and artificial intelligence. Johnson & Johnson predicts that the industry’s revenue will reach 77 billion U.S. dollars by 2021.
The unnamed company will focus on self-care and over-the-counter products such as Band-Aid, Aveeno, Neutrogena and Listerine.according to NBC Finance Channel, The company will also participate in ongoing lawsuits that claim that Johnson & Johnson’s baby powder will cause cancer, which the company denies. The industry is expected to generate $15 billion in revenue in 2021. Both companies will be publicly traded.
Duato, who is about to become CEO, said of the spin-off: “We believe that the new Johnson & Johnson and the new consumer health company will be able to more effectively allocate resources to provide services to patients and consumers, drive growth and release important value. “
Johnson & Johnson expects the separation to be completed within 18 to 24 months, but clarified in a press release that “there is no guarantee that the proposed transaction will be finalized or the transaction will be completed.”
Johnson & Johnson joined Toshiba and General Electric, which also announced the spin-off. General Electric with Toshiba Plan to split into three companies.
