This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Baxter International to Split In Response to Macro Challenges

NEW YORK (TheStreet) - Healthcare giant Baxter International (BAX - Get Report) said on Thursday it would split its pharmaceuticals business and its medical devices businesses into two publicly traded companies, allowing the two units to map out their own growth strategies and product offerings. The split was also characterized as a response to diverging dynamics between the two businesses and a rapidly changing macro-environment.

Baxter's pharmaceuticals business, BioScience, generated about $6 billion in 2013 revenue. It's portfolio of recombinant and plasma-based proteins treat hemophilia and other bleeding disorders, and its plasma-based therapies treat immune deficiencies, alpha-1 antitrypsin deficiency, burns and shock, and other chronic and acute blood-related conditions.

Baxter shares were rising over 15% in pre-market Thursday trading to $80.70.

The company's medical products business generated $9 billion in 2013 revenue and consists of a portfolio of intravenous (IV) solutions and nutritional therapies, drug delivery systems and administration sets, premixed and other injectable drugs, as well as inhalation anesthetics and hospital-based biosurgery products. The unit continues to integrate Gambro AB, a recent acquisition. Baxter said as an independent company, the medical products division will on geographic expansion and increased penetration in its existing network.

Both companies will remain headquartered in Illinois. Robert L. Parkinson, Jr., will serve as chairman and CEO of the medical products company, which will retain the Baxter International name. BioScience's current president, Ludwig N. Hantson, Ph.D., will be named chief executive officer of the new biopharmaceuticals company, which has yet to be named.

The split will occur in a tax-free distribution to Baxter shareholders and is expected to be completed by mid-2015.

"Baxter has an established history of executing successful spinoffs, and we have continued to evaluate the separation of these two businesses in response to diverging business dynamics and the rapidly changing macro-environment," Baxter CEO Parkinson said in a statement. "This decision underscores Baxter's commitment to ensuring its long-term strategic priorities remain aligned with shareholders' best interests."

Abbot Laboratories (ABT) recently completed a similar split, separating its AbbVie (ABBV) pharmaceuticals unit. 

Exclusive of dividend payments, Baxter shares had fallen over 1% in the 12-months of trading as of Wednesday's close.

-- Written by Antoine Gara in New York

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BAX $69.42 -0.77%
AAPL $129.36 0.21%
FB $79.60 -0.19%
GOOG $573.64 0.40%
TSLA $199.56 1.13%

Markets

DOW 18,203.37 -85.26 -0.47%
S&P 500 2,107.78 -9.61 -0.45%
NASDAQ 4,979.9010 -28.1950 -0.56%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs