Johnson & Johnson (JNJ) will spin off at least 80.1% of its shares in consumer healthcare company Kenvue (KVUE) through an exchange offer, the company said Monday.
J&J shareholders will have the option to exchange all, some or none of their common stock for Kenvue stock at a 7% discount.
KEY SHOTS
- Johnson & Johnson is offering shareholders the option to exchange shares for Kenvue’s at a 7% discount.
- Consumer health company Kenvue spun off from Johnson & Johnson in May.
- J&J and Kenvue reported better-than-expected second-quarter results thanks to resilient demand for their products.
Johnson & Johnson owned about 90% of Kenvue before the exchange offer was launched. Kenvue was the Consumer Health division of Johnson & Johnson before it was spun off initial public offering (IPO) in May as part of a strategic decision to make both companies more agile and create long-term value for their respective shareholders.
In the IPO filing, J&J pledged not to distribute shares for 180 days after the event prospectus it was filed in April without the approval of the lead underwriters, Goldman Sachs and JPMorgan Securities.
J&J and Kenvue both reported better-than-expected second-quarter results as demand for J&J’s medical products increased and consumer spending on Kenvue brands like Band-Aid and Tylenol proved resilient. It was Kenvue’s first quarterly earnings report since its IPO.
Shares of Kenvue fell 0.3% in early trading on Monday following the announcement and are down 11% for the year, while Johnson & Johnson shares are up 1.7% and 5.8% for the year.
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