Abbott has announced plans to separate its global nutrition business into an independent, publicly traded company, as well as lowering its 2026 sales growth forecast.
The new company will have approximately $8.5bn in annual sales, about 16,000 employees and 14 manufacturing sites.
Its portfolio will include Similac, PediaSure, Pedialyte, Glucerna and Ensure — with Ensure and Similac market leaders in their respective categories.
Abbott intends to complete the separation by the end of 2027 through a tax-free distribution of shares to its shareholders.
The deal is subject to regulatory approvals, the effectiveness of a Form 10 registration statement and final board approval.
Daniel Salvadori, currently Executive Vice President and Group President, Established Pharmaceuticals and Nutritional Products, will become CEO of the new company.
“This separation will benefit both companies,” said Robert Ford, Abbott’s Chair and CEO.
Following the split, Abbott will focus on medical devices, diagnostics and established medicines, with sales of about $42bn.
Product innovation continues
In its announcement, Abbott said the nutrition business had launched ten products in the first half of 2026.
These included a high-protein Ensure shake with 42 g of protein, a ready-to-feed liquid infant formula made with whole milk in the US under the Similac brand and dye-free Pedialyte products.
It said the new company will be positioned to capitalise on trends including metabolic health, prevention and wellness.
Pressure on the division
Reuters reported that the division lost a major US government supply contract last year and faced higher manufacturing costs, prompting price increases that hurt demand.
The baby formula business has also faced setbacks since a 2022 recall and the shutdown of Abbott’s Sturgis, Michigan plant.
Abbott’s own figures show worldwide nutrition sales fell 3.1% year on year in the second quarter of 2026, reflecting lower volumes and the effect of pricing actions taken in the fourth quarter of 2025, although sales rose $127m sequentially on the first quarter.
The company has reportedly said it plans to introduce eight new products during the next 12 months, alongside the pricing changes, to support a recovery.
Abbott now expects 2026 sales growth of about 6%, down from its earlier forecast of 6.5% to 7.5%.
The company said the separation itself will not affect its 2026 guidance. Its shares fell four per cent in premarket trading.
Not Abbott’s first split
Abbott announced plans in October 2011 to separate into two publicly traded companies, with its research-based pharmaceuticals business becoming AbbVie while Abbott kept its diversified medical products, including nutritionals.
The latest move marks another reshaping of its portfolio.
It also follows Johnson & Johnson in planning a business separation for 2027, as large healthcare groups sharpen their focus on higher-growth segments.
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What it means for the nutraceutical sector
For suppliers and manufacturers in functional and clinical nutrition, a standalone Abbott nutrition company could mean a more nutrition-specific approach to innovation, sourcing and investment.
The business will continue to operate as part of Abbott throughout the separation process.
