Abbott to Separate Nutrition Unit as Shares Slide on Guidance Cut
Abbott Laboratories intends to split off its nutrition division, whose brands include Similac, Pedialyte and Ensure, into a standalone public company by the end of 2027. The unit produces about $8.5 billion in annual revenue and has been the company's weakest performer. Abbott shares fell more than 4% before the opening bell after it reduced its 2026 sales growth outlook and left unclear which company would handle the baby-formula litigation.
Abbott plans to divide itself so investors would hold stock in two public companies, with the nutrition arm—maker of Similac, Pedialyte and Ensure—becoming independent by late 2027. The transaction is designed as a tax-free distribution, subject to approvals and a Form 10 filing; combined dividends are expected to equal Abbott’s payout at separation.
The remaining business would focus on medical devices, diagnostics and branded generics, with roughly $42 billion in yearly sales. Nutrition generated about $8.45 billion in 2025, only slightly above 2021, and its U.S. sales fell 4.5% in the first nine months of this year.
The split could affect families who depend on Similac, Pedialyte and Ensure, as a standalone nutrition company may set different priorities for supply, pricing and product investment. It may also create uncertainty for plaintiffs in baby-formula litigation until Abbott discloses where those liabilities sit. Employees, suppliers and shareholders face transition risks, while patients could benefit if a focused company improves execution—or face disruption if separation distracts management.