Abbott Laboratories plans to separate its nutrition business into an independent publicly traded company as weakness in its medical-device operations prompted the healthcare group to lower its 2026 sales-growth forecast.
The nutrition operation includes major brands such as Similac infant formula and Ensure nutritional drinks and generated more than $8 billion in sales last year.
The planned separation represents a significant restructuring of Abbott’s portfolio, allowing the company to concentrate more heavily on medical devices, diagnostics and established pharmaceutical products while creating a standalone nutrition company.
The announcement came alongside weaker expectations for Abbott’s medical-device business.
The company lowered its forecast for full-year organic sales growth, excluding COVID-19 testing, to approximately 5.5% from its previous expectation of 6% to 6.5%.
Medical-device sales increased 6.6% organically during the third quarter, below Wall Street expectations of approximately 8.1%.
Abbott’s continuous glucose-monitoring business remained a source of strength, with FreeStyle Libre sales rising about 15%.
The nutrition separation also comes as Abbott continues dealing with litigation connected to premature-infant formula. The company has said scientific evidence does not establish that its products cause the intestinal disease at the center of those cases.
For investors, the strategic question is whether separating nutrition creates two companies capable of attracting stronger valuations independently than they receive inside Abbott’s existing diversified structure.
The transaction will also leave the remaining Abbott more concentrated in medical technology, increasing the importance of restoring stronger growth across its device portfolio.
Markets will now watch the timetable and structure of the separation, medical-device demand and whether Abbott can stabilize organic growth following the guidance reduction.
