• by Les Luchter , August 24, 2022

The planned consumer product spinoff of Johnson & Johnson now has a designated chairman of the board: Larry Merlo, who retired as president and CEO of CVS Health in 2021 after a decade in the position.

Thibaut Mongon, J&J’s executive vice president and worldwide chairman of consumer health, had previously been designated chief executive officer of the yet-unnamed new company, and Paul Ruh, CFO of J&J’s consumer heath business, as chief financial officer.

When J&J splits into two companies, an event subject to legal “consultation with works councils and employee representatives,” Johnson & Johnson will be devoted to pharmaceuticals and medical devices, while the consumer company will handle such products as Tylenol, Band-Aid, Neutrogena, Aveeno, Listerine and Johnson’s.

The new J&J will remain the world’s largest health products company, the current J&J said.

J&J says the planned separation, first announced last November, will be “better positioned to deliver improved health outcomes for patients and consumers through innovation, pursue more targeted business strategies and accelerate growth.

Large pharma companies -- which also include Merck, GSK, Novartis and Pfizer -- have been shedding consumer health and other so-called “slow-growing” businesses to “capitalize on innovations in spaces like oncology, rare diseases, and cell and gene therapy and devote enough capital to compete long term,” S&P Global Market Intelligence has explained.

According to Reuters, “Companies have been breaking up their businesses amid a growing consensus that they perform best when the focus is streamlined, as well as increasing pressure from activist investors to boost shareholder returns  

Merck’s consumer health business was sold to Procter & Gamble in 2018.

GSK spun off its consumer business as Haleon earlier this year, which also includes Novartis’ and Pfizer’ former consumer businesses, taken over by GSK in 2015 and 2019 respectively.