Johnson & Johnson is peeling off a consumer health business that helped it become the world's biggest health care products maker.
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The 135-year-old company said Friday that it will separate its segment that sells Band-Aids, Listerine and over-the-counter medicines like Tylenol from its pharmaceutical and medical device businesses.
The split, which will create another publicly-traded company for the consumer health side, will make each business more nimble in adapting to their respective markets. The company said it was aiming to complete the separation in 18 to 24 months at a cost of $500 million to $1 billion.
J&J CEO Alex Gorsky said that while the company's broad focus has worked in the past, the split addresses segments that "have evolved as fundamentally different businesses."
"We've seen a significant evolution in these markets, particularly on the consumer side," Gorsky said, referring in part to a shift toward online shopping that accelerated during the COVID-19 pandemic.
The move by the world's largest health products company follows similar announcements by conglomerates Toshiba, General Electric, and other J&J rivals, and underscores how big, diversified corporations are under pressure to simplify their structures to increase focus.
