Following its share-exchange initiative aimed at reducing its stake in Kenvue, Johnson & Johnson has announced that it will maintain a 9.5% ownership in the consumer health spinoff. The offer, which began on July 24 and concluded on August 18, enabled J&J shareholders to trade a portion of their J&J shares for Kenvue shares.
Kenvue made its debut on the New York Stock Exchange earlier this year at a price of $22 per share, marking the most substantial IPO in over a year as reported by CNBC. J&J’s initial announcement indicated that it held around 1.7 billion Kenvue shares, representing approximately 90% ownership of the company. The exchange offer allowed for the swapping of up to 1.54 billion Kenvue shares for outstanding J&J shares at a 7% discount. Interestingly, the response exceeded expectations, with only around 23.8% of tendered J&J shares ultimately being exchanged for Kenvue shares. Detailed results of the exchange will be unveiled later this week.
The deal was valued around $36 billion, based on Kenvue’s share price of nearly $24, which has remained steady. Johnson & Johnson’s move to reduce its involvement in Kenvue aligns with its strategy to focus more intently on transformative innovation within its core pharmaceutical and medical technology businesses, as stated by CEO Joaquin Duato.
Kenvue, recognized for its consumer health brands such as Neutrogena, Aveeno, Tylenol, Listerine, Band-Aid, and Zyrtec, has shown promising performance since its inception. In the second quarter, the newly independent company achieved sales of $4 billion, signifying a noteworthy 5.4% increase compared to the previous year’s second quarter when it was under J&J’s umbrella.
