Abbott will separate its Nutrition business into an independent, publicly traded company through a tax-free distribution to Abbott shareholders.
The separation is expected to be completed by the end of 2027. Following years of costly legal battles, manufacturing woes, a lost government contract and declining sales from the business, the move will allow Abbott to better focus on its pure-play medtech products.
The new company, whose portfolio will include well-known products including Similac, PediaSure, Pedialyte, Glucerna and Ensure, will be a global leader in the rapidly growing healthy nutrition market, according to Abbott.
"As we continue to shape Abbott for the future, this separation will benefit both companies, setting each one up for maximum success in its respective market," said Robert B. Ford, chairperson and chief executive officer, Abbott, in a statement.
“Our Nutrition business has a unique opportunity to capitalize on the growing demand for healthy nutrition, and it will be better positioned as an independent company to more effectively direct its strategic resources across its priorities."
“At the same time, Abbott's core higher-growth, innovation-driven portfolio of medical devices, diagnostics and established medicines has compelling growth opportunities to improve the health and lives of people around the world.”
With roughly $8.5 billion in annual sales, 16,000 employees, and 14 manufacturing sites, the Nutrition company will have scale across developed and emerging markets and poised to capitalize on consumer health and nutrition trends, including metabolic health, prevention and wellness, said Abbott.
The unit has, however, been under fire, notably for its baby formula proportion of the business. In April 2026, a jury ordered Abbott to pay $70 million in damages to a group of families that had accused the company of failing to warn that its formula for premature infants can cause a potentially deadly bowel disease.
In a statement, Abbott denied culpability and said it believed science was ignored in the case. "This verdict, and the continued pursuit of a theory at odds with regulators and the medical community, risks eliminating vital options for doctors and the most vulnerable infants."
Meanwhile, a Missouri family was awarded $495 million in 2024 after claiming Abbott's premature-infant formula caused permanent neurological damage to their daughter and would need long-term care.
They argued Abbott failed to adequately warn doctors about the alleged NEC risk associated with its products.
Earlier this year, the company’s appeal was upheld and later announced agreements totaling approximately $670 million to resolve the family’s case and claims involving about 2,000 other individuals. Abbott denied liability, calling the settlement a compromise and not an admission of wrongdoing.
Despite its legal troubles, Abbot’s Nutrition business expanded its portfolio with ten product launches in the first half of 2026, including a high-protein Ensure shake and a ready-to-feed liquid infant formula made with whole milk.
Abbott intends to separate the Nutrition business through a distribution of shares of the independent Nutrition company to Abbott shareholders. Upon completion of the separation, Abbott shareholders will own shares in both Abbott and the independent Nutrition company.
This also follows a trend from other Big Pharmas, such as GSK, Johnson & Johnson and Medtronic, which have also been hiving off consumer or other businesses in recent years.