Johnson & Johnson plans to spin off its consumer health division that sells Listerine and Baby Powder to focus on pharmaceuticals and medical devices in the biggest shake-up in the U.S. company’s 135-year history.
The move by the world’s largest health products company follows similar announcements by conglomerates Toshiba and General Electric and underscores how big, diversified corporations are under pressure to simplify their structures.
This has particularly been the case in healthcare, where the slow-and-steady business of selling products such as shampoos and moisturizers has increasingly diverged from the high-risk, high-reward work of developing and marketing blockbuster drugs.
“We think these have evolved as fundamentally different businesses,” J&J Chief Executive Alex Gorsky said. He said the differences in the businesses had become particularly clear during the COVID-19 pandemic as consumers bought more products online.
The company said it was aiming to complete the separation in 18 to 24 months at a cost of $500 million to $1 billion. J&J shares, part of the Dow Jones Industrial Average, were up 1.5%.
“This is just an example of delivering value to shareholders by specializing the businesses,” said Shannon Saccocia, chief investment officer at Boston Private, which holds J&J stock and is part of SVB Financial Group.
Johnson & Johnson’s Band-Aids baby shampoo and cough remedies have long been the face of the company.
But its pharmaceutical and medical equipment business, which makes cancer treatments, vaccines and surgical tools, is on track for nearly $80 billion in sales this year, way ahead of the $15 billion its consumer products are expected to bring in.
The higher growth outlook comes despite disappointing sales of Johnson & Johnson’s COVID-19 vaccine following a string of production setbacks and fierce competition from rivals Pfizer Inc and Moderna.
(GRAPHIC: Consumer health projected to make up about 16% of J&J’s 2021 sales – https://graphics.reuters.com/JNJ-DIVESTITURE/gkplgdbnbvb/chart.png)
MONEY FOR DEALS?
Johnson & Johnson’s plan to hive off its consumer health business into a publicly traded company echoes a move by GlaxoSmithKline and Pfizer, which also plan to spin off their joint consumer health business next year.
German drugmaker Merck KGaA sold its consumer health division to Procter & Gamble Co in 2018.
“The firm’s timing is surprising, as we don’t see any major catalyst for the move. However, if the consumer division no longer holds the deep pockets of the combined company, the risk of future consumer product litigation – such as the large talc settlement – may decrease,” Morningstar analyst Damien Conover said in a research note.
Johnson & Johnson’s consumer division has faced a spate of lawsuits alleging its talcum powder for babies causes cancer, which the company has denied.
It has created a subsidiary to manage the multi-billion-dollar claims and said on Friday the decision to separate the consumer division had nothing to do with the lawsuits.
J&J stopped selling the baby powder in the United States and Canada last year.
“It’s important to state upfront that today’s announcement is separate and distinct from the talc liability and bankruptcy proceedings that were announced a few weeks ago,” said Chief Financial Officer Joseph Wolk.
J&J’s medical device and pharmaceuticals business has faced tens of thousands of lawsuits for products including DePuy and Pinnacle implants, surgical mesh products and Xarelto blood thinner.
Jeff Jonas, asset manager at GAMCO Investors, said a spin-off would allow the company to be more acquisitive.
“Ultimately, when they do finish the consumer spin-off, they’ll probably raise a little bit of cash and put a little bit of debt on the consumer business, which would give them more money to do deals,” he said.
Another analyst suggested the flurry of spin-offs suggested shareholders should be cautious.
“Historically, when the market becomes fully valued, we see a great number of spins being announced as companies look for alternate ways of creating more shareholder value,” said Jim Osman, founder of research firm Edge Consulting Group. “It’s something worth noting for the investor.”
(Reporting by Manas Mishra in Bengaluru; writing by Nick Zieminski; Editing by Arun Koyyur, Carmel Crimmins, David Clarke and Dan Grebler)
OLG confirms where in Ontario winning $8.8-million Lotto 6/49 ticket was sold – CTV News Toronto
The OLG has revealed where in Ontario the winning ticket for Saturday’s $8.8 million Lotto 6/49 jackpot was purchased.
According to the OLG, the winning ticket was sold somewhere in Mississauga, but the exact location within the city can’t be publicly announced for security reasons.
The second price in Saturday’s draw of $207,248.90 was sold in Lambton County.
A $1-million ticket was also sold in Niagara Region.
“It was a clean sweep for Ontario for this Lotto 6/49 draw in terms of the big prices,” OLG spokesperson Tony Bitonti told CTV News Toronto on Sunday.
Another three tickets purchased in Ontario won a $100,000 Encore prize.
Those tickets were sold in Ottawa, Simcoe County, and Grey County, the OLG said.
The jackpot for the next Lotto 649 draw on Dec. 8 will be an estimated $5 million.
According to the OLG, Lotto 6/49 players in Ontario have won more than $13.5 billion in prices since 1982.
High River Cargill beef processing plant workers vote 71 per cent in favour of new deal – CTV Edmonton
Cargill workers approved a new contract with 71 per cent support, avoiding a strike or lockout.
After two days of voting, employees at the beef-processing plant in High River, Alta., embraced the new labour contract.
In a statement, the United Food and Commerical Workers (UFCW) Local 401, representing workers at the plant, said on Saturday that it was a “bittersweet victory.”
The site, employing about 2,000 people, experienced a COVID-19 outbreak last year that affected more than 900 people and forced Cargill to close the plant temporarily. Three deaths have been linked to the outbreak, including two workers and one family member.
Workers will receive $4,200 in retroactive pay, a $1,000 signing bonus, a 21 per cent wage increase over the life of the contract, and improved health benefits. The company also agreed to provisions to facilitate a new culture of health, safety, dignity, and respect in the workplace.
“Our employees in High River are important to Cargill’s work to nourish the world in a safe, responsible and sustainable way,” said Jarrod Gillig, Cargill North America’s business operations and supply chain president, in a statement to CTV News.
“We are pleased to have reached an agreement that is comprehensive, fair, and reflective of their commitment to excellence at Cargill and the critical role they play in feeding families across Canada.”
According to UFCW Local 401, the union and workers were ready for a potential strike, erecting tents in front of the plant, installing floodlights and propane heaters, levelling nearby fields to act as parking lots, and finalizing a picketing payroll system.
UFCW Local 401 president Thomas Hesse previously told CTV News that the deal was “fair” but would support workers on the picket line if they decided to reject the offer.
“Tomorrow, work will begin to enforce and apply the new provisions of the Cargill union contract,” Hesse said in a statement Saturday. “Local 401 congratulates and thanks Cargill union members and our Cargill Bargaining Committee.”
Hesse added that the past few months were trying for many employees at the plant.
MORE WORK TO DO
While the decision was not an easy one and a cause for celebration, UFCW Local 401 says there is further work.
The union says workers at the JBS Plant in Brooks, Alta., observed the Cargill proceedings as they head into bargaining for a new contract next year. Additionally, the UFCW Local 401 says it plans to continue pushing for meatpacking industry reforms and restructuring.
As prices for meat continue to soar at the grocery store, Hesse said more needs to be done to better support workers and ranchers.
“Workers have been ripped off. Ranchers have been ripped off. And we’ve all been ripped off at the supermarket counter,” he said. “Government failed to protect these workers, as well as failing to protect Alberta ranchers and consumers. Change must occur.”
With files from CTV News Calgary’s Michael Franklin
Why employers may need to bend toward a more flexible future to stay competitive – CBC.ca
You don’t have to convince Ross Simmonds about the benefits of remote work.
The founder and CEO of Foundation Marketing has been leading the way on that front, running his business as “remote first” since it started in 2014.
While the company may officially be based in Halifax, it employs team members as far away as Ireland and Nigeria.
“I like to say we’re based on the internet,” said Simmonds, whose 30-plus staff also includes people in the U.S. and a half-dozen Canadian provinces.
The long-term provision of more flexible work will remain a key draw for employees in Canada’s future economy and also for organizations looking to retain their services, employers and experts say.
It’s already the case in a COVID-altered work world that millions of Canadians are used to doing things differently and don’t necessarily want to go back to the way things were.
“Workers, at this point, who work online have come to expect to be able to continue to work online,” said Eddy Ng, the Smith Professor of Equity & Inclusion in Business at Queen’s University in Kingston, Ont.
Some Canadian employers are factoring this reality into their thinking as they shape their approach to their business.
At software giant SAP Canada, the organization is bending toward a more flexible future — one that many employers will have to contend with as they compete for talent, said SAP Canada vice-president and head of HR Megan Smith.
“Most talent, at this point, expects some degree of flexibility in where and when they work,” Smith said. “So organizations that really want to attract the best talent are going to want to offer some degree of that.”
Simmonds said it’s already clear people are moving toward jobs that provide that.
Foundation Marketing has been fielding inquiries about job opportunities from people at other companies who have been told they are going back to the office.
“That’s when we see a spike for the number of applicants applying for our roles,” said Simmonds.
Binod Sundararajan, the interim director of Dalhousie University’s Rowe School of Business, said companies are weighing what they are “going to get by bringing people back,” including the impact on corporate culture.
But that consideration is taking place amid an awareness that they have workers who want more flexibility, he said.
Canada has more than four million people working at home, according to Statistics Canada’s latest labour force survey. That group would include many people whose remote work experience began with the arrival of the COVID-19 pandemic.
Janet Candido, the founder and principal of the Toronto-based Candido Consulting Group, has observed a shifting set of employee preferences over the course of the pandemic.
At the start, Candido heard employees expressing a strong desire to be able to work at home. Then some people found the home-work environment tough to adjust to, she said.
“Now that pendulum seems to have swung back, where people really do want not necessarily to work remotely all the time,” said Candido. “They want the flexibility now.”
But Candido, too, notes she has seen people leaving their jobs in recent months because they found a new employer that permits remote work.
Meanwhile, Simmonds said he’s seen organizations that are trying to implement a blend of office and remote work — a development he views as “a good step forward.”
When flexibility is offered to workers, Simmonds said, it’s key to convey to people they won’t be “viewed negatively” for preferring a remote setup, if that’s what works best for them.
“Don’t be afraid to go hybrid, but in doing so, don’t discipline those who do not embrace fully coming back to the office,” he said.
Less commuting, more options
The more traditional a company’s working arrangements, the more limited its hiring choices may be — at least when compared to organizations offering more flexible options.
“If you need everybody to come into the office, they need to be [living] within commuting distance,” said Candido.
That lack of a commute is one of the reasons Simmonds favoured remote work for Foundation Marketing. He thought others would feel the same way.
“I had a hypothesis that there was a lot of other people out there in the world who would get a lot of value for not having to do the commute and not having to work in an office building,” Simmonds said.
He said he also believed “it would be a competitive advantage to be able to be fully remote, because you would be able to attract some of the brightest and greatest minds, with no limit to their location.”
What about those left behind
There are, however, many workers for whom remote work won’t be an option in future — and not only because of the jobs they currently have.
Because to move to a job that can be done remotely, a person has to have a certain set of baseline digital skills that may not be easily acquired outside of a work or school context.
“If they want to be part of the remote economy, they have to have new skills,” said Ng, noting this is a long-term problem that policy-makers have failed to solve.
And while some may see remote work as having potential to help alleviate some barriers for these workers, Ng said the reality is very different.
“The availability of workers who are underrepresented is simply not there,” said Ng, explaining these same people are often in jobs that do “not permit them to actually retrain or retool.”
There’s a need for employers to take a long-term view, Ng said, and be willing to invest in people to help them gain the broader skills required to move toward new employment.
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