The IUP Journal of Case Folio
Johnson & Johnson Spin-Off

Article Details
Pub. Date : June' 2023
Product Name : The IUP Journal of Case Folio
Product Type : Article
Product Code : IJCF040623
Author Name : Smita Ray and Manish Agarwal
Availability : YES
Subject/Domain : Management
Download Format : PDF Format
No. of Pages : 15



The case is about Johnson & Johnson Corporation's (J&J) spin-off of its consumer health business. The company came into existence in the year 1886 and grew significantly over the years. Over a period of 135 years, while J&J expanded its business to countries around the world, it also faced various issues related to its products, among them its baby powder. The case highlights how these issues af fected the performance of the company and increased its liability to about $24 bn by the end of September 2021. To rid itself of such liabilities, J&J came up with the plan of restructuring its business and started looking for various restructuring alternatives. The company decided to spin-off its consumer health business to reduce its debt burden. With this separation, it was expected to increase its focus on each business, strengthen its financial position, and offer more products and better health products to patients and consumers. It remains to be seen whether the spin-off decision is really going to help J&J revamp its p o s i t i o n .

This planned transaction would create two businesses that are each financially strong and leaders in their respective industries. We believe that the new Johnson & Johnson and the New Consumer Health Company would each be able to more effectively allocate resources to deliver for patients and consumers, drive growth and unlock significant value.

- Joaquin Du ato, Chief Executive Officer (CEO), Johnson & Johnson, 2021


On November 12, 2021, Johnson & Johnson Corporation (J&J), a US-based healthcare conglomerate, announced that it was going to spin-off1 its consumer health business. The spin-off was expected to complete by November 2023.2 As per the plan, J&J was going to split its business into two separate public companies. One company would deal with drugs and medical devices carrying the brand name of J&J, whereas the other company would deal with consumer health