Johnson & Johnson plans to split into two companies

Tbe company is turning its consumer health arm into a separate company

Johnson & Johnson said on Friday that it would break itself up into two publicly traded companies, in the latest instance of corporate giants shrinking themselves to please shareholders.

The 135-year-old company, which employs more than 1,36,000 people, announced that it planned to spin off its consumer-products division — home to Tylenol, Band-Aid, Neutrogena beauty products and more — into a separate business. That would leave J&J with its pharmaceutical and medical devices division, which includes its coronavirus vaccine manufacturing.

The company said it planned to complete the separation in 18 to 24 months.

“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, the outgoing chief executive, said in a statement. J&J had previously announced that Joaquin Duato would become chief executive in January, while Gorsky would continue as executive chairman.

The decision comes days after General Electric, another icon of corporate America, revealed a plan to break itself up into three companies. And it was announced hours after Toshiba, a stalwart of Japanese industry, said it, too, would split itself up.

Behind the moves is pressure on corporate executives to simplify their sometimes sprawling business empires, in hopes of bringing more focus to their companies and lifting their stock prices.

But J&J has also grappled with thousands of legal claims that its talc-based products may have caused cancer. J&J discontinued sales of talc-based baby powder in North America last year, though it has said that the powder is safe. In October, a division the company had created to manage those lawsuits filed for bankruptcy protection.

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