Abbott Will Spin Off Its $8.5 Billion Nutrition Business, Home to Ensure and Similac

Some of the best-known names in nutrition are about to become their own company. Abbott plans to spin off its global nutrition business.

TLDR

• The new company will have about $8.5 billion in annual sales.
• Its brands include Ensure, PediaSure, Pedialyte, Glucerna and Similac.
• The separation is expected to be complete by the end of 2027.
• Third-quarter nutrition sales rose 5.1% to $2.26 billion.

The Plan

Abbott will separate its nutrition business into an independent, publicly traded company with about 16,000 employees and 14 manufacturing sites, NutraIngredients reported. Daniel Salvadori, currently executive vice president and group president of Established Pharmaceuticals and Nutritional Products, will be its CEO. Abbott keeps its medical devices, diagnostics and established pharmaceuticals businesses, with about $42 billion in annual sales.

“Upon completion of the separation, Abbott shareholders will own shares of both Abbott and the new nutrition company,” said Phil Boudreau, Abbott’s chief financial officer.

The Numbers

Nutrition sales rose 5.1% in the third quarter to $2.26 billion. Pediatric nutrition grew 8.8% to $1.06 billion and adult nutrition grew 2% to $1.2 billion. For the first nine months of the year, nutrition sales were still down 1.3%.

“Our Nutrition business has a unique opportunity to capitalize on the growing demand for healthy nutrition,” said Robert Ford, Abbott’s chairman and CEO.

Why It Matters

Abbott’s CEO is betting on growing demand for healthy nutrition, from protein shakes to hydration and diabetes nutrition, a market also shaped by aging consumers and GLP-1 users who need more protein in fewer calories. A standalone company built around Ensure, Glucerna and Pedialyte will compete directly with consumer food brands for that shopper.

Source: NutraIngredients. Read the report.