Abbott Laboratories announced Wednesday it will separate into two companies, one dedicated to medical products and the other to pharmaceuticals.
The break-up marks a dramatic change for the 123-year-old, North Chicago-Based company, which currently takes in about $40 billion in revenue annually.
The medical products company will retain the Abbott name and will continue to sell generic drugs, medical implants, diagnostic tests drugs and baby formula. The research-based pharmaceutical company recently has had profits driven by the anti-inflammatory drug Humira, an injectable drug which posted $6.5 billion in sales last month.
"Today's news is a significant event for Abbott, and reflects another dynamic change in our company's 123-year history, strengthening our outlook for strong and sustainable growth and shareholder returns," said Miles D. White, Abbott's chairman and chief executive officer.
White said the two companies will send clearer messages to investors, allowing them to value each on their distinct characteristics. Shares of the new company will be distributed to Abbott shareholders in a tax-free transaction.
The separation is the latest in a series of large company breakups which includes splits to companies including Kraft Foods, Sara Lee and Fortune Brands.