J&J joins the break-up streak

J&J joins the break-up streak

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After a decades-long romance, Johnson & Johnson’s (JNJ) consumer health business will be separating from its pharmaceutical and medical device business. The company announced plans for the breakup last Friday in hopes of faster growth for both segments.

The pharmaceutical and medical device business will keep the Johnson & Johnson name, while the consumer health business will become a separate publicly traded company under a new name and ticker symbol that’s yet to be determined. The new company will retain iconic brands and products like Neutrogena, Aveeno, Band-Aids, Listerine, and Tylenol.

Johnson & Johnson’s pharmaceuticals and medical devices are its real money-makers, earning the company $19.6b last quarter. Consumer health products on the other hand brought in just $3.7b. The split, if approved by the company’s board of directors, will occur over the next two years.

Why it matters

Having some corporate breakup deja vu? Johnson & Johnson's breakup follows the news of General Electric's (GE) breakup that we reported on last week. Both companies believe the separations will make their business divisions more nimble and operationally efficient.

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