STURGIS, MI (WTVB) – Abbott Laboratories has announced plans to separate its nutrition business into an independent, publicly traded company.
The strategic carve-out follows a turbulent period for the healthcare giant, headlined by a $385 million civil settlement with the U.S. Department of Justice and state governments in September.
That penalty resolved a multi-year federal investigation into manufacturing deficiencies and safety allegations at Abbott’s Sturgis, plant.
Contamination fears at the facility in 2022 led to a massive recall of powdered infant formulas, including its flagship brand Similac, and triggered a severe nationwide supply shortage.
The planned spinoff, which is expected to be completed by the end of 2027, will create a standalone entity housing popular consumer brands like Similac, Ensure, and Pedialyte.
Abbott executives say the separation will allow both companies to optimize capital allocation and focus on their distinct market advantages.
Once the transaction clears, the newly formed nutrition business is projected to command roughly $8.5 billion in annual sales, while the remaining core of Abbott will pivot exclusively toward its higher-growth sectors in medical devices, diagnostics, and pharmaceuticals.
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