Johnson & Johnson splits into two companies and separates the pharmaceutical business from mass consumption

The American multinational Johnson & Johnson announced this Friday that it is going to divide into two companies, one dedicated to the pharmaceutical business and the other to consumer products. Both firms will be listed on the stock market in a corporate operation that will entail months of internal work, since the separation of assets and businesses will take between 18 and 24 months, as indicated by the company through a statement.

US orders Johnson & Johnson to discard 60 million COVID vaccines due to production error

US orders Johnson & Johnson to discard 60 million COVID vaccines due to production error

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Before this decision, the company is worth about 430,000 million dollars on the stock market, about 375,000 million euros.

This spin-off move takes place just a few days after the industrial giant General Electric has announced a similar step, although, in its case, it will split into three companies. Other companies linked to the pharmaceutical sector, such as Pfizer or Merck, have also separated their businesses more closely linked to mass consumption in recent years. The first, creating a joint venture in this activity with GlaxoSmithKline; and the second, that he sold it almost three years ago to Procter & Gamble.

Protection and efficiencies

Johnson & Johnson has explained that this business move seeks to achieve more operational efficiencies and a clearer focus for both businesses. However, this separation of areas also has other legal and fiscal derivatives.

It must be remembered that in recent years, the US group has been involved in different legal processes. One of them, for hide that their talcum powder contained asbestos, a substance considered carcinogenic, which forced the company to provision almost $ 4 billion, in the face of possible judicial contingencies.

On the other hand, its pharmaceutical division has also been involved in cases related to the use of opiates, for failing to adequately inform patients about the consequences of these medications. Now, with the separation into two differentiated listed companies, the two companies will have better corporate protection against these processes.

As for the business itself, the pharmaceutical arm of J&J -which is behind the vaccine of its subsidiary Janssen– It is the one that generates the most income for the multinational. This unit, according to the Bloomberg agency, contributed about 55% of its 2020 annual income, which reached 83,000 million dollars.

On the other hand, the mass consumption business, which includes brands such as Listerine or Neutrogena, among others, accounted for 17% of its turnover, while another part of its activity is linked to the sale of devices for medical use, which would now remain linked to the pharmaceutical business.

Regarding its presence in Spain, where it does not have factories, the multinational indicates that it has 1,600 employees among its different areas of activity. These, he points out, are focused on activities such as engineering, finance, marketing, regulation, among other areas.


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