Abbott Plans to Separate Nutrition Business Into Publicly Traded Company by End of 2027

Abbott Laboratories (NYSE:ABT) has announced plans to spin off its Nutrition division into a separate publicly traded company, with the transaction expected to be completed by the end of 2027, subject to regulatory and corporate approvals.

The proposed separation would create an independent business focused on nutritional products while allowing Abbott to concentrate on its medical devices, diagnostics and established pharmaceuticals operations.

Abbott’s Nutrition division generates approximately $8.5 billion in annual revenue and includes consumer brands such as Ensure, Similac, PediaSure, Pedialyte and Glucerna.

The business employs approximately 16,000 people and operates 14 manufacturing facilities.

Under the proposed transaction, Abbott intends to distribute shares in the new Nutrition company to its existing shareholders through a tax-free spin-off.

Following completion, current Abbott shareholders would hold shares in both Abbott and the newly established Nutrition company.

The group said it expects the combined dividends paid by the two businesses to equal Abbott’s dividend at the time of the separation.

After the transaction, Abbott would retain its medical devices, diagnostics and established pharmaceuticals divisions, which are expected to generate approximately $42 billion in annual sales.

The proposed restructuring would establish two publicly traded companies operating in different segments of the healthcare industry, each with its own management and business priorities.

Daniel Salvadori, currently Abbott’s executive vice president and group president of Established Pharmaceuticals and Nutritional Products, has been selected to serve as chief executive officer of the independent Nutrition company.

Robert B. Ford, chairman and chief executive officer of Abbott, commented on the proposed separation.

“As we continue to shape Abbott for the future, this separation will benefit both companies, setting each one up for maximum success in its respective market,” Ford said.

The transaction remains subject to several conditions, including regulatory approvals, the effectiveness of a Form 10 registration statement filed with the US Securities and Exchange Commission and final approval from Abbott’s board of directors.

Abbott said the planned separation would not affect its financial guidance for 2026 or the guidance for 2027 that it expects to issue in January.

The company anticipates incurring one-time costs associated with the transaction, although it has not yet disclosed an estimate of those expenses.

Goldman Sachs & Co. LLC is acting as financial adviser to Abbott, while Wachtell, Lipton, Rosen & Katz is providing legal counsel.

The proposed spin-off would represent a change in Abbott’s corporate structure, separating its consumer nutrition operations from its remaining healthcare businesses.

Further details regarding the transaction, including the new company’s capital structure and financial arrangements, are expected to become available as the separation process progresses towards its planned completion in 2027.

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