Johnson & Johnson released a statement last week announcing its plan to split the conglomerate into two separate publicly traded companies.
The segment of the company that sells products like bandages, mouthwash, and over-the-counter medication, known as Consumer Health business, will become its own company. The decision to separate comes after years of internal issues, such as lawsuits and shareholder division.
In the statement, the company claimed that after the separation, there would be “two global leaders that are better positioned to deliver improved health outcomes” and that “the new Johnson & Johnson would remain the world’s largest and most diverse healthcare company”.
Brands that will be sold under the new Johnson and Johnson will include Neutrogena, AVEENO®, Tylenol®, Listerine®, JOHNSON’s®, and BAND-AID®. Additionally, it will continue developing various medical devices and life-saving treatments, like DARZALEX, ERLEADA, IMBRUVICA, STELARA and TREMFYA. The Pharmaceutical and Medical Devices segments of the new company are expected to bring in $77 billion in 2021.
Starting January 3, 2022, current CEO Alex Gorsky will become the Executive Chairman of Johnson & Johnson and move the CEO position to Joaquin Duato, who currently is the Vice Chairman of the Company’s Executive Committee. Once the separation is complete, Duato will continue leading the new Johnson & Johnson.
The completion of the split is expected to take 18-24 months. The financial advisors are Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC and the legal counsel will be Cravath, Swaine & Moore LLP and Baker & McKenzie LLP.
“Throughout our storied history, Johnson & Johnson has demonstrated that we can deliver results that benefit all our stakeholders, and we must continually be evolving our business to provide value today, tomorrow and in the decades ahead,” Gorsky said of the split.
“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.” Duato added that, “This planned transaction would create two businesses that are each financially strong and leaders in their respective industries.”
ARTICLE: RITA VOGT
MANAGING EDITOR: CARSON CHOATE
PHOTO CREDITS: NEW YORK TIMES
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