Johnson & Johnson’s plans to spin off its orthopedics business is underway, and the move is expected to, leaders said in its third quarter 2025 earnings call.
“We continue to invest at industry leading levels in our pipeline and portfolio while making disciplined decisions to exit businesses that we believe will be better able to thrive outside of Johnson & Johnson.,” Johnson & Johnson CEO Joaquin Duato said, as transcribed by Investing.com Oct. 14. “For our orthopedics business, the planned separation creates new opportunities … We expect DePuy Synthes to benefit from a more focused business model with greater flexibility to extend its market leadership, invest in its commercial capabilities, and capitalize on profitable growth opportunities.”
Led by Namal Nawana, DePuy Synthes would be the largest orthopedics company with a leading market share across major business categories, Mr. Duato said.
The spinoff process began with the intention to qualify as a tax-free separation, Johnson & Johnson CFO Joe Wolk said in the call.
“However, we will consider other avenues that optimize shareholder value,” Mr. Wolk said. “We do not expect any change to the Johnson & Johnson dividend and are mindful of any impact from stranded costs that are typically present in these types of transactions. Finally, following the separation, we would expect DePuy Synthes to have a strong capital structure that would allow the orthopedics business to build on its long history of innovation and extend leadership positions through enhanced organic investment and strategic growth. Accretive M&A as we pursue this separation, the orthopedics unit will operate in alignment with the business current strategy, continuing to make investments in growth, margin improvement and innovation.”
