Abbott, which also cut its 2026 sales growth guidance, said company sales will total $42 billion following the separation.

Abbott is the latest major medtech company to turn to the spinout strategy. Medtronic separated its diabetes business earlier this year, and Johnson & Johnson is planning to spin out its orthopedics business.

Abbott CEO Robert Ford framed the decision as a benefit for both companies and a way to “maximize success” in their markets, as well as a way for the remaining company to focus on higher-growth markets.

"Our Nutrition business has a unique opportunity to capitalize on the growing demand for healthy nutrition, and it will be better positioned as an independent company to more effectively direct its strategic resources across its priorities,” Ford said in the announcement. “At the same time, Abbott's core higher-growth, innovation-driven portfolio of medical devices, diagnostics and established medicines has compelling growth opportunities to improve the health and lives of people around the world."

After the spin, Abbott’s remaining businesses will be diagnostics, established pharmaceuticals and medical devices. The company will have approximately $42 billion in sales.

Abbott expects to complete the spin off at the end of 2027, subject to regulatory approval and other closing conditions. When the deal is complete, Abbott stockholders will own shares in both Abbott and the new company.

The planned separation will not have an impact on Abbott’s guidance for 2026 or 2027, which the company plans to provide in January.

P. Morgan analyst Robbie Marcus said that the spinout should be a good strategy for Abbott’s overall business going forward.

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