Johnson & Johnson to split into two separate companies focused on consumer brands and medical needs

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The company thinks having different entities will allow it to play to its strengths

Johnson & Johnson as we know it is no more. On Friday, the company announced that it intends to split off its consumer health business into a new publicly-traded company. In the company’s eyes, the separation would allow one entity to focus on consumer products and the other to hone in on business strategies in the medical and pharmaceutical sectors.

The company feels good about its chances. In announcing the split, it said the “new” Johnson & Johnson would remain the world’s largest and most diverse health care company.

“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,” Alex Gorsky, Executive Chairman of Johnson & Johnson, said. 

“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.”

Breaking down the split

The company hasn’t decided on a name for the consumer-focused operation yet, but shoppers don’t need to fret about their favorite brands changing names. Neutrogena, AVEENO, Tylenol, Listerine, Clean & Clear facial wash, Acuvue contact lenses, and BAND-AID will still be around and using the monikers they’re known by.

In confirming that those brands will stay put, Gorsky said having all of its consumer eggs in one basket will provide the company with the agility and flexibility to grow its iconic portfolio of brands and innovate new products. It doesn’t appear like there will be any cost-cutting job elimination either. 

“We are committed to the success of each organization, as well as our company’s more than 136,000 employees around the globe, who will remain the backbone of these businesses,” he said.

The new consumer company is expected to complete its separation in 18 to 24 months.

Health company focused on saving lives

On the other side of the Johnson & Johnson split, the company will play to its strength in pharmaceutical and medical needs, much like it did with its COVID-19 vaccine. The company said that side of the new Johnson & Johnson would continue to build on its offering of “life-saving treatments.”

“The new Johnson & Johnson would continue to play a leading role in advancing the industry forward by creating novel solutions, bringing together treatments spanning therapeutics, robotics, artificial intelligence and more, to change the way diseases are prevented, intercepted and eventually cured,” the company said.

The planned organizational design for the new health-focused company is expected to be completed by the end of 2022.

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