Abbott plans to separate its $8.5 billion Nutrition business into a public company

Abbott Laboratories (ABT) said Wednesday it intends to separate its global Nutrition business into an independent, publicly traded company, a regulatory filing showed.

The Nutrition business has about $8.5 billion in annual sales, the company said in a press release attached to the filing. Abbott shareholders would own shares in both Abbott and the new Nutrition company after the separation.

According to the filing, the two businesses have different investment identities, growth profiles and innovation cycles. Each would allocate resources and capital to fit its own business model.

Robert B. Ford, chairman and chief executive officer of Abbott, said the separation would benefit both companies. “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 new Nutrition company would hold brands including Similac, PediaSure, Pedialyte, Glucerna and Ensure. The company said Ensure is the world’s No. 1 adult nutrition supplement drink, PediaSure is the world’s No. 1 pediatric nutrition supplement, and Glucerna is the world’s No. 1 diabetes management nutrition brand.

The Nutrition business has about 16,000 employees and 14 manufacturing sites, the company said.

Daniel Salvadori, executive vice president and group president, Established Pharmaceuticals and Nutritional Products, would become chief executive officer of the new company. He joined Abbott in 2014 and was appointed to his current position in 2021, the filing said.

Before joining Abbott, Salvadori held leadership roles at CFR Pharmaceuticals and Sandoz, the company said.

After the transaction, Abbott would have sales of approximately $42 billion and about 106,000 employees, the company said. Its businesses would include cardiovascular and neuromodulation devices, biowearables, laboratory, point-of-care and cancer diagnostics, and established medicines.

The company expects the combined dividend paid by Abbott and the new Nutrition company to equal Abbott’s dividend at the time of separation. The transaction is intended to qualify as tax-free for U.S. federal income tax purposes.

Abbott expects to complete the transaction by the end of 2027. Completion is subject to customary conditions, including regulatory approvals, effectiveness of a registration statement on Form 10 and final approval by the Abbott Board of Directors.

The separation will not affect Abbott’s 2026 guidance or the 2027 guidance the company plans to provide in January, it said.

Abbott expects one-time charges tied to the transaction before the separation. The company has not quantified them and said it will do so at a later date. The filing does not give a value for the transaction.

The Nutrition business will continue to operate as part of Abbott throughout the separation process.

Goldman Sachs & Co. LLC is serving as financial advisor to Abbott, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel.

Abbott said it would discuss the transaction on its third-quarter earnings conference call on Wednesday at 8 a.m. Central time (9 a.m. Eastern time).