Johnson & Johnson (J&J) is anAmerican multinational corporation founded in 1886 that developsmedical devices, pharmaceuticals, and consumer packaged goods. The company issplitting into two companies, separating the division that sells Band-Aids andListerine, from its medical device and prescription drug business.
The company said in a statement that theirdivision will be separated within 18 to 24 months.
The new consumer health company will housebrands including Neutrogena, Aveeno, Tylenol, Listerine, Johnson's, andBand-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,” ChiefExecutive Officer Alex Gorsky said in an interview on Bloomberg Television.“Covid-19 we think also brought about a fundamental change about how peoplethink about personal care.”
“Following a comprehensive review, the boardand management team believe that the planned separation of the consumer healthbusiness is the best way to accelerate our efforts to serve patients,consumers, and healthcare professionals, create opportunities for our talentedglobal team, drive profitable growth, and - most importantly - improvehealthcare outcomes for people around the world,” CEO Alex Gorsky said in his statement.
J&J shares, part of the Dow JonesIndustrial Average (DJI), were up 1.5%. The pharmaceutical and medicaldevices unit will retain the J&J name and the company expects a tax-freespinoff.
Johnson & Johnson's Band-Aids babyshampoo and cough remedies have long been the face of the company. Thecorporation includes some 250 subsidiary companies with operations in 60countries and products sold in over 175 countries. Johnson & Johnson hadworldwide sales of $82.6 billion during the calendar year 2020.
The move by the world’s largesthealth-products company comes hot on the heels of similar announcements thisweek by industrial conglomerates Toshiba and General Electric andunderscores how big, diversified corporations are under pressure to simplify.