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UPDATE 2-Covidien to spin off pharma business
December 15, 2011 / 12:25 PM / 6 years ago

UPDATE 2-Covidien to spin off pharma business

* Plans spin-off of pharma unit, with $2.0 bln sales

* Spin-off in form of distribution

* Transaction may take up to 18 months

(Adds details)

Dec 15 (Reuters) - Healthcare products and medical device maker Covidien Plc said on Thursday it plans to spin off its pharmaceutical business into a stand-alone public company.

The spin-off, anticipated by Wall Street for several years, would likely take up to 18 months and be in the form of a distribution.

Covidien’s pharmaceutical business accounts for about $2.0 billion of Covidien’s sales while the medical products business, after the spin-off, would generate about $9.6 billion in sales, the company said.

“[The two units] have distinctly different business models, sales channels, customers, capital requirements and talent bases,” Chief Executive Jose Almeida said in a prepared statement.

Its pharmaceutical company is one of the world’s largest producers of bulk acetaminophen, the largest United States supplier of opioid pain medications and is among the top 10 generic pharmaceuticals manufacturers in the United States, the company said.

It is also one of the world’s leading suppliers of generators used to produce technetium-99m, a critical diagnostic medical isotope. It is the only manufacturer that offers a fully integrated system of diagnostic contrast media in prefilled syringes and injectors.

(Reporting by Debra Sherman in Chicago and Kavyanjali Kaushik in Bangalore; Editing by Sreejiraj Eluvangal, Dave Zimmerman)

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