Johnson and Johnson announce plan to split

[TheMotorcycleBoy]

When I saw this announcement, I had in mind of a déjà vu; then I realised that I was confusing this with the Glaxo split. Well, not really, but of course the two businesses do have some similarities. Arguably JNJ have a somewhat broader portfolio since they have a medical devices BU as well. In fact they currently seem like a fusion between our Glaxo and Smith+Nephew.

NEW BRUNSWICK, N.J. November 12, 2021– Johnson & Johnson (the “Company”) (NYSE: JNJ) today announced its intent to separate the Company’s Consumer Health business, creating a new publicly traded company. The planned separation would create two global leaders that are better positioned to deliver improved health outcomes for patients and consumers through innovation, pursue more targeted business strategies and accelerate growth.

Following the planned separation, the new Johnson & Johnson would remain the world’s largest and most diverse healthcare company and continue its commitment to lead in global healthcare R&D and innovation, with a portfolio that blends its strong Pharmaceutical and Medical Device capabilities focused on advancing the standard of care through innovation and technology. As previously announced, Mr. Alex Gorsky will serve as Executive Chairman of Johnson & Johnson and transition the Chief Executive Officer role to Mr. Joaquin Duato, currently Vice Chairman of the Company’s Executive Committee, effective January 3, 2022. Mr. Duato would continue to lead the new Johnson & Johnson following completion of the planned separation.

The New Consumer Health Company would be a leading global consumer health company, touching the lives of over one billion consumers around the world every day through iconic brands such as Neutrogena, AVEENO®, Tylenol®, Listerine®, JOHNSON’s®, and BAND-AID® and continuing its legacy of innovation. The New Consumer Health Company’s Board of Directors and executive leadership would be determined and announced in due course as the planned separation process progresses.

Mr. 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. 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.”

Mr. Gorsky continued, “For the new Johnson & Johnson, this planned separation underscores our focus on delivering industry-leading biopharmaceutical and medical device innovation and technology with the goal of bringing new solutions to market for patients and healthcare systems, while creating sustainable value for shareholders. We believe that the New Consumer Health Company would be a global leader across attractive and growing consumer health categories, and a streamlined and targeted corporate structure would provide it with the agility and flexibility to grow its iconic portfolio of brands and innovate new products. 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.”

Mr. Duato commented, “This planned transaction would create two businesses that are each financially strong and leaders in their respective industries. We believe that the new Johnson & Johnson and the New Consumer Health Company would each be able to more effectively allocate resources to deliver for patients and consumers, drive growth and unlock significant value. Importantly, the new Johnson & Johnson and the New Consumer Health Company would remain mission driven companies with exceptional brands, commitments to innovation, and remarkable talent. Each company would carry on the Johnson & Johnson legacy of putting the needs and well-being of the people we serve first.”

Just like Glaxo, JNJ's split intends to spin off the health care divisions.

https://www.jnj.com/johnson-johnson-ann ... h-business

Matt

[ADrunkenMarcus]

NEW BRUNSWICK, N.J. November 12, 2021– Johnson & Johnson (the “Company”) (NYSE: JNJ) today announced its intent to separate the Company’s Consumer Health business, creating a new publicly traded company. The planned separation would create two global leaders that are better positioned to deliver improved health outcomes for patients and consumers through innovation, pursue more targeted business strategies and accelerate growth.

I do wish people would stop fiddling with things!

[GrahamPlatt]

Briefly thought this was about Boris & Carrie.

[TheMotorcycleBoy]

NEW BRUNSWICK, N.J. November 12, 2021– Johnson & Johnson (the “Company”) (NYSE: JNJ) today announced its intent to separate the Company’s Consumer Health business, creating a new publicly traded company. The planned separation would create two global leaders that are better positioned to deliver improved health outcomes for patients and consumers through innovation, pursue more targeted business strategies and accelerate growth.

I do wish people would stop fiddling with things!

Don't you think that it would represent an improvement? Which is perhaps a way of saying that many such similar companies should never have indulged in their many M&A experiments in the past. For example, Glaxo, Unilever, Reckitt Benckiser etc. etc.

Drawn very slightly from personal experiences of working in firms that have grown too big, where the breakdown of communications between various BUs and the higher echelons becomes apparent, often in negative ways.

Matt

[ADrunkenMarcus]

Don't you think that it would represent an improvement?

I guess only time will tell. I think JNJ was doing pretty well as it was.

Best wishes


Mark.

[Lootman]

Don't you think that it would represent an improvement?

I guess only time will tell. I think JNJ was doing pretty well as it was.

It was and is one of my oldest US holdings.

Often these demergers add value on the basis that the sum of the parts is worth more than the whole. In fact venerable old GE is doing the same thing in 2022, splitting into three (airplane engines, power generation and the rest). United Technologies did the same a year or two ago.

And consumer staples is a different sector than healthcare so there is some logic to the split.

What I don't like about these splits, at least in a taxable account, is that I end up with 2 or 3 holdings and I need to be careful to ensure the cost basis is distributed correctly between the spawn.

[ADrunkenMarcus]

What I don't like about these splits, at least in a taxable account, is that I end up with 2 or 3 holdings and I need to be careful to ensure the cost basis is distributed correctly between the spawn.

I had that issue with Reckitt in 2014.

Best wishes


Mark.

[AleisterCrowley]

Wouldn't we just end up with two companies called Johnson ?