For J&J, Resistance to a Breakup Proved Futile
The pharma giant bows to the compelling logic of separating its consumer unit from its devices and drugs business.
Now it’s Johnson & Johnson’s turn to break itself up. The $435 billion U.S. pharmaceutical behemoth is to carve out its consumer-health arm, leaving behind a more focused drug-discovery and medical-devices business. The idea of spinning off the company behind Listerine mouthwash and Band Aids has been in the air for some time — because it makes eminent sense.
The pressure to end longstanding conglomerate structures is clearly proving hard to resist. J&J’s move follows General Electric Co.’s decision to separate into three units. Japanese industrial icon Toshiba Corp. is doing the same. In pharmaceuticals, J&J’s European peers stole a march: GlaxoSmithKline Plc is working on a spinoff of its own mammoth consumer business (a joint venture with Pfizer Inc.), while Novartis AG has been gradually hiving off units — including a stake last week in rival Roche Holding AG — that weren’t core to its scientific mission.