Abbott to spin off nutrition business 

Abbott Laboratories said it plans to spin off its nutrition unit after a series of missteps with its iconic brands including the infant formula Similac, narrowing its remaining business to focus on core healthcare products.

Abbott's nutrition facility in Cootehill in Co Cavan processes 500,000 litres of milk every day, sourcing ingredients from around 1,000 dairy farms. Across the wider business, Abbott in Ireland employs over 5,500 people at 10 sites. Healthcare products manufactured in Ireland are now exported to more than 130 countries around the world.

The move to create a separate publicly traded company for the nutrition business is expected to be completed by the end of 2027, Abbott said. The still-unnamed company will have annual sales of about $8.5bn (€7.5bn) from its key brands, including Pedialyte and Ensure. Daniel Salvadori, group president of established pharmaceuticals and nutritional products at Abbott, was named chief executive.

The planned separation won’t impact 2026 or 2027 guidance, Abbott said. It comes as the company narrowed its forecast for full year 2026 earnings to between $5.50 and $5.55 per share, trimming the upper end. It reported third-quarter sales and profit performance that met Well Street’s expectations, while medical device sales fell short.

Abbott’s shares have declined more than 18% since the start of the year through Tuesday’s close.

“This separation will benefit both companies, setting each one up for maximum success in its respective market,” Abbott Chief Executive Officer Robert Ford said.

The nutrition business is changing, influenced by wellness trends and changing consumer preferences away from products like ultraprocessed food, he said on an earnings call on Wednesday. The new company will be able to make changes and adapt “faster and more efficiently and effectively as an independent company,” he said.

The industry has proven difficult to navigate, with manufacturers grappling with costly recalls and mounting litigation. Abbott isn’t alone in rethinking its exposure: rival Reckitt Benckiser also sought to shed its Mead Johnson infant-formula business to focus on more high performing areas.

Other healthcare conglomerates have also slimmed down their operations in recent years. Last week, the Irish Examiner reported that Johnson & Johnson plans to spin off Depuy, Synthes, its hips and knees business which has major operations in Cork, next year. J&J previously spun off its consumer health business, creating Kenvue in 2023. 

Large medical device companies including Medtronic have also pruned their portfolios substantially.

Abbott lowered prices on some of its nutrition products at the end of last year to attract price-conscious consumers, after previously raising them to account for higher manufacturing costs.