Johnson & Johnson Decides to Split into Two Companies
Posted on 11/12/2021
Johnson & Johnson (J&J) revealed a decision to split its consumer products business from its pharmaceutical and medical device operations, creating two publicly traded companies.
“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,” outgoing Johnson & Johnson CEO Alex Gorsky said in a statement.
The separation would have one company oversee its household products unit, maker of Band-Aid bandages, Tylenol, Aveeno and Neutrogena skin care products, and Listerine.
The healthcare side would focus on riskier, fast-growth areas such as prescription drugs, medical devices, and its COVID-19 vaccine. The healthcare side would take on the incoming Johnson & Johnson CEO Joaquin Duato.
Big Lawsuit over Cancer-Causing Baby Powder
Judge Craig Whitley, a federal bankruptcy judge in North Carolina. agreed on November 10, 2021 to temporarily halt circa 38,000 lawsuits against Johnson & Johnson. The claim is that Johnson & Johnson’s baby powder was contaminated with cancer-causing asbestos (can cause ovarian cancer and mesothelioma). Judge Craig Whitley only delayed the cases for 60 days. The judge ruled that the case should be heard in New Jersey, where Johnson & Johnson is headquartered.
In November 2020, Johnson & Johnson pulled its baby powder from store shelves in the U.S. and Canada. In October 2021, Johnson & Johnson created a new subsidiary called LTL in Texas and moved its baby powder-related business into LTL. Then LTL filed for bankruptcy in North Carolina. This legal move is known as the “Texas Two Step”.
