Johnson & Johnson will separate the company’s Consumer Health business, creating a new publicly traded company. J&J is ranked No. 5 in Happi's The Top 50. The company's personal care sales were $7.6 billion last year. Corporate sales were $82.6 billion. J&J has leading positions in skin care, baby care and hair care. The move is expected to be completed by the end of 2022.

According to J&J, the 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.The New Consumer Health Company would be a global leader with a powerful 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. J&J's iconic consumer product brands include Johnson's, Listerine, Neutrogena and Aveeno. The overall consumer health segment, which includes products such as bandages and pain relievers, 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.

In recent years, J&J has defended itself against lawsuits charging the talc in Johnson's Baby Powder causes ovarian cancer. An article in the Journal of the American Medical Association found no link between talc and ovarian cancer.

According to Johnson & Johnson, the new Consumer Health Company would be expected to benefit from a strong investment grade profile and balance sheet that would allow it to build on its long history of innovation and maintain and extend its leadership position across important and growing categories.

Under terms of the plan, Alex Gorsky will serve as executive chairman of Johnson & Johnson and transition the chief executive officer 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.

“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,” said Gorsky. “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.”

According to Gorsky, the separation underscores the company's 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,” added Gorsky. “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.”

According to Duato, 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,” he said. “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.”

The planned separation is expected to create value for all stakeholders by aiming 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.