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Abbott plans to spin off its $8.5 billion Nutrition business by the end of 2027
The Similac and Ensure maker would be separated through a planned tax-free share distribution, leaving Abbott with about $42 billion of sales in devices, diagnostics and medicines.
HedgeWeekly News Desk ·
Abbott Laboratories said on Wednesday it intends to separate its global Nutrition business into an independent listed company by distributing the new company's shares to Abbott shareholders. The transaction is designed to be tax-free for US federal income tax purposes and is expected to be completed by the end of 2027, subject to regulatory approvals, an effective Form 10 registration statement and final approval from Abbott's board. The plan was announced alongside third-quarter results.
The unit has about $8.5 billion of annual sales, roughly 16,000 employees and 14 manufacturing sites, with brands including Similac, Ensure, PediaSure, Pedialyte and Glucerna. Daniel Salvadori, who runs Abbott's established pharmaceuticals and nutrition products and joined the company in 2014, will become chief executive. Robert Ford remains chairman and CEO of Abbott, which would keep about $42 billion of sales and some 106,000 employees across cardiovascular and neuromodulation devices, biowearables, diagnostics and established medicines.
Nutrition has been the group's slowest-moving business: its sales in the first nine months of 2026 were $6.4 billion, against $6.5 billion a year earlier, Food Business News reported. Abbott said the two companies' combined dividend is expected to equal its own dividend at the time of separation, that one-time transaction charges will be quantified later, and that the plan does not affect its 2026 guidance or the 2027 outlook due in January. Goldman Sachs is financial adviser and Wachtell, Lipton, Rosen & Katz is legal counsel.
For investors, the split would turn one diversified healthcare stock into a larger medtech and diagnostics group and a smaller consumer nutrition company with flat recent sales. No financing, debt or standalone financial details were given on Wednesday, so the Form 10 filing and the size of the one-time charges are the next markers to watch before the 2027 target. The dividend commitment covers the combined payout at separation only; neither company's policy after that has been set out.