Johnson & Johnson (J&J) has announced plans to split the company into two separate, standalone publicly traded companies, one focused on pharmaceuticals and medical devices, and the other on consumer health.

The new J&J, focused on pharmaceutical and medical devices, is expected to have full-year 2021 revenues of approximately $77 billion, and the planned new Consumer Health Company, is projected to have full-year 2021 revenues of $15 billion.  

Alex Gorsky, currently Chairman & CEO, J&J, will serve as Executive Chairman of J&J and transition the CEO role to Joaquin Duato, currently Vice Chairman of the company’s Executive Committee, effective January 3, 2022.  Mr. Duato would continue to lead the new J&J following completion of the planned separation.

The new Consumer Health company’s Board of Directors and executive leadership would be determined and announced in due course (as reported on November 12, 2021) as the planned separation process progresses.

The company is targeting completion of the planned separation in 18 to 24 months (as reported on November 12, 2021), subject to the satisfaction of certain conditions, including, consultations with works councils and other employee representative bodies, as required, final approval of Johnson & Johnson’s Board of Directors, receipt of a favorable opinion and Internal Revenue Service ruling with respect to the tax-free nature of the transaction, and the receipt of other regulatory approvals.

The planned organizational design for the new Consumer Health company is expected to be completed by the end of 2022. The planned new Consumer Health company employees are expected to continue participating in their current J&J pay, benefits and retirement programs through the end of 2022.

The Board of Directors’ intent is to effect the planned separation through the capital markets and create two independent companies. The transaction is intended to qualify as a tax-free separation for US federal income tax purposes.

For a further analysis of the new J&J and Consumer Health Company, see related feature article, “Inside the New J&J  and Consumer Health Company.”

Source: Johnson & Johnson