Bausch said the new group, which will include Bausch Health's global vision care, surgical, consumer and ophthalmic Rx businesses, would likely be reporting as a stand-alone division by the first quarter of next year. It generated $4.9 billion in revenue over the course of 2019, the company said.
"We are committed to taking action to unlock what we see as unrecognized value in Bausch Health shares, and we believe that separating our business into two highly focused, stand-alone companies is the way to accomplish that goal," Chief Executive Joseph Papa said in a statement.
"Four years ago, we initiated a multiphase plan, first to stabilize and then to transform Bausch Health into a company positioned to deliver long-term organic growth."
Bausch Health shares were marked 12% higher following the spin-off announcement to change hands at $21.75, a move that trims the stock's year-to-date decline to around 27%.
The group also unveiled second-quarter earnings that included a loss of 92 cents per share on weaker-than-expected revenue of $1.66 billion as coronavirus lockdown orders kept customers at home and hammered eye-care sales.
Bausch Health also narrowed its full-year adjusted earnings guidance to a range of $3.15 to $3.30 per share, and sees revenue in the range of $7.8 billion to $8 billion.
"We have divested approximately $4 billion of non-core assets, paid down over $8 billion of debt, resolved numerous legacy legal issues and managed a loss of exclusivity on an approximately $1.4 billion product portfolio, while also investing in R&D, new product launches and core franchises with attractive growth opportunities," said Papa.
"Our Board of Directors and management team have been working on alternatives over the last 12 months to determine how to best unlock value across our businesses, and we believe that the time is right to begin the separation process, so each business has greater flexibility to pursue strategic opportunities in their respective markets."