Abbott Spins Off Its Nutrition Business as a Separate Company

Abbott Laboratories will spin off its nutrition business into a separate company. It will include Similac infant formula, Ensure drinks and other brands. This division generated more than $8 billion in revenue last year. The change is expected to be completed in 2027.

It should be noted that the business is currently facing several challenges. The company lost a significant US government contract, production costs have risen, and higher prices have reduced demand.

Abbott's problems related to the infant formula business date back to 2022. At that time, the company halted sales of part of its product line and temporarily closed a Michigan plant. It now also has lawsuits related to certain products.

Abbott has lowered its annual sales growth forecast from 6.5-7.5% to about 6%. In the third quarter, the company's revenue was $13.01 billion, with adjusted earnings of $1.42 per share.

Abbott's management believes that the separated nutrition business will be able to develop more quickly on its own.

Source: Reuters