US-based Baxter International has revealed its plans to split itself into two separate and independent entities, one focusing on medical products and the other developing and marketing innovative biopharmaceuticals.
Baxter has positioned both businesses to be successful, profitable and sustainable independent companies and believes that it can tap more value and growth potential by splitting into two entities instead of in a larger, multifaceted organisation.
The move will create two, well-capitalised independent companies with strong balance sheets, investment grade profiles, and disciplined approaches to capital allocation.
The bigger of the two is the medical products business, which will retain the Baxter International name. It has generated more than $9bn in sales in 2013. This division offers a broad portfolio of intravenous (IV) solutions and nutritional therapies, drug delivery systems and administration sets, premixed and other injectable drugs, as well as inhalation anesthetics and hospital-based biosurgery products.
This division will also incorporate kidney dialysis competitor Gambro, which Baxter acquired for $3.9bn in September 2013 in order to augment the company’s already sizable renal therapies presence.
The biopharmaceuticals business produced $6bn in revenues in 2013, and includes diverse portfolio of recombinant and plasma-based proteins to treat haemophilia and other bleeding disorders, and plasma-based therapies to treat immune deficiencies, alpha-1 antitrypsin deficiency, burns and shock, and other chronic and acute blood-related conditions.
The corporate headquarters of both companies will be located in northern Illinois. Robert Parkinson Jr, will serve as chairman and CEO of the medical products company, while Dr Ludwig N Hantson, who currently serves as president of BioScience, will be CEO of the new biopharmaceuticals company, which will be named at a later date.
The deal is expected to be completed by mid-year 2015, subject to market, regulatory and other conditions.