Johnson & Johnson Kenvue spinoff: JNJ consumer health division business separation date and details
By Jenny McCall
11:43, 17 October 2022
Health and pharmaceutical giant Johnson & Johnson (JNJ) is following in the footsteps of its competitor GlaxoSmithKline (GSK) and spinning-off its consumer healthcare division.
The new company will be called Kenvue and JNJ revealed in September that it got its inspiration for the new name from Scotland, as “ken” refers to knowledge, while “vue” relates to sight.
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JNJ to spin-off its consumer health division
“The new corporate brand comes to life through a compelling purpose, and a timeless visual brand,” J&J said in its release.
Well, it seems that compelling is the word of the day for JNJ’s consumer division as it accounted for $14.6bn (£12.9bn) (16%) of J&J’s revenue in 2021. The segment is home to a host of well-known products such as Aveeno, Band-Aid, Listerine, Neutrogena, and Tylenol.
It was in November that JNJ first revealed that it would separate from its consumer division and form a new publicly traded company.
“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,” Alex Gorsky Executive Chairman of Johnson & Johnson said in a press release.
JNJ's share price has been down 3% this year, as it grapples, like many other organisations, with rising production costs, interest rates and recession woes. With this spin-off going ahead, the hope is it will revive JNJ’s share price. Here are the details in full.
GlaxoSmithKline (GSK) share price history
How much revenue will the spin-off generate?
The spin-off is expected to generate between $500m to $1bn.
When will the spin-off be complete?
The spin-off is forecast to complete by November 2023 and began in November 2021. It has been given a timeframe of 18 to 24 months.
Why is JNJ splitting?
JNJ is trying to streamline its business and removing its consumer arm will enable it to do this. JNJ wants to invest more into its medicines and medical devices divisions, which brought in $80bn combined in 2021. Despite JNJ’s poor sales with its Covid-19 vaccine, its medicine segment still brings in more growth than its consumer business.
What will happen to JNJ stock once the split is complete?
Once the spin-off is complete the new company will trade separately and the JNJ split is expected to make more shareholder returns, as each business will not be diluted by the other segments. JNJ shares currently trade at $164.46.
What will the spin-off mean for shareholders?
Current JNJ shareholders will still own shares in JNJ and once the split takes place, they will own shares in the new company as well.
JNJ also said: “In addition, it is expected that the overall shareholder dividend will remain at least at the same level following the completion of the transaction.”
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