11.12.21
Johnson & Johnson has announced plans to separate the company’s Consumer Health business, creating a new publicly traded company.
The planned separation would create two global companies that are better positioned to deliver improved health outcomes for patients and consumers through innovation, pursue more targeted business strategies and accelerate growth.
The planned separation aims to achieve the following key goals:
Following the separation, the new Johnson & Johnson would continue its commitment to lead in global healthcare R&D and innovation, with a portfolio that blends its Pharmaceutical and Medical Device capabilities focused on advancing the standard of care through innovation and technology.
As previously announced, Alex Gorsky will serve as executive chairman of Johnson & Johnson and transition the CEO role to Joaquin Duato, currently vice chairman of the company’s executive committee, effective January 3, 2022. Duato would continue to lead the new Johnson & Johnson following completion of the planned separation. After departing from Johnson & Johnson, Gorsky has announced he will become Apple’s executive chairman in January.
The New Consumer Health Company would be a global leader with a portfolio of iconic brands — comprising four $1 billion megabrands and 20 brands over $150 million — and leading positions in Self Care (OTC), Skin Health and Essential Health, which includes baby care, feminine care, wound care and oral health. Brands under this company would include Neutrogena, Aveeno, Dr.Ci:Labo, NeoStrata and more.
The Consumer Health segment is expected to generate revenue of approximately $15 billion in Full-Year 2021 and, following the planned separation, the New Consumer Health Company would generate sales in over 100 countries, driven by innovation capabilities and demonstrated business momentum.
He continued, "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.”
The planned organizational design for the New Consumer Health Company is expected to be completed by the end of 2022 and will be subject to legal requirements including consultation with works councils and employee representatives, as required.
The company is targeting completion of the planned separation in 18 to 24 months, subject to the satisfaction of certain conditions.
The planned separation would create two global companies that are better positioned to deliver improved health outcomes for patients and consumers through innovation, pursue more targeted business strategies and accelerate growth.
The planned separation aims to achieve the following key goals:
- Increase management focus, resources, agility and speed to effectively address differing industry trends and to better meet the needs of the new Johnson & Johnson and the New Consumer Health Company patients and consumers;
- Further focus capital allocation based on the objectives of each independent company;
- Provide each company with a compelling financial profile that more accurately reflects the strengths and opportunities of each business and, as a result, offers investors a more targeted investment opportunity; and
- Align corporate and operational structures so each company is better able to drive growth and value creation.
Following the separation, the new Johnson & Johnson would continue its commitment to lead in global healthcare R&D and innovation, with a portfolio that blends its Pharmaceutical and Medical Device capabilities focused on advancing the standard of care through innovation and technology.
As previously announced, Alex Gorsky will serve as executive chairman of Johnson & Johnson and transition the CEO role to Joaquin Duato, currently vice chairman of the company’s executive committee, effective January 3, 2022. Duato would continue to lead the new Johnson & Johnson following completion of the planned separation. After departing from Johnson & Johnson, Gorsky has announced he will become Apple’s executive chairman in January.
The New Consumer Health Company would be a global leader with a portfolio of iconic brands — comprising four $1 billion megabrands and 20 brands over $150 million — and leading positions in Self Care (OTC), Skin Health and Essential Health, which includes baby care, feminine care, wound care and oral health. Brands under this company would include Neutrogena, Aveeno, Dr.Ci:Labo, NeoStrata and more.
The Consumer Health segment is expected to generate revenue of approximately $15 billion in Full-Year 2021 and, following the planned separation, the New Consumer Health Company would generate sales in over 100 countries, driven by innovation capabilities and demonstrated business momentum.
Statement from Alex Gorsky, CEO
Gorsky said, “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."He continued, "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.”
The planned organizational design for the New Consumer Health Company is expected to be completed by the end of 2022 and will be subject to legal requirements including consultation with works councils and employee representatives, as required.
The company is targeting completion of the planned separation in 18 to 24 months, subject to the satisfaction of certain conditions.