Johnson & Johnson to reduce its Kenvue stake by at least 80% through exchange offer

Johnson & Johnson connected Monday said it plans to trim by astatine slightest 80% its stake successful Kenvue, the user wellness concern it spun out arsenic an autarkic institution earlier this year, via a banal exchange offer.

J&J owns 89.6% of Kenvue's communal stock, which amounts to much than 1.72 cardinal shares. 

The speech offer, besides known arsenic a split-off, volition let J&J shareholders to swap each oregon a portion of their shares for Kenvue's communal banal astatine a 7% discount. The connection is expected to beryllium tax-free, J&J said successful a release. 

The institution noted that the split-off is voluntary for investors and is slated to adjacent connected August 18, which is acold earlier than expected.

J&J said it received a waiver that dismisses the stock lockup play associated with Kenvue's archetypal nationalist offering successful May. That lockup statement would person required J&J to hold 180 days to merchantability immoderate of its shares. 

"We judge present is the close clip to administer our Kenvue shares, and we are assured that a split-off is the due way guardant to bring worth to our shareholders," J&J CEO Joaquin Duato said successful a statement. 

Duato added that the split-off with sharpen J&J's absorption connected its pharmaceutical and medtech businesses – some of which helped the institution beat connected second-quarter gross and adjusted net past week. 

Shares of J&J roseate astir 1% successful premarket trading Monday, portion shares of Kenvue fell astir 3%

J&J archetypal announced its intent to motorboat an speech connection successful its second-quarter net study connected Thursday, but the institution provided fewer details connected the plan. Shares of Kenvue fell pursuing that announcement, contempt second-quarter results that besides topped Wall Street estimates. 

When asked astir J&J's planned speech connection connected Thursday, Kenvue CEO Thibaut Mongon told CNBC's "Squawk connected the Street" that the institution is "pleased with the mode that the IPO has been received by shareholders."

"We spot a batch of alignment among our caller investors successful seeing the imaginable of Kenvue, but I tin archer you that we are afloat acceptable to permission arsenic a afloat autarkic company," helium said.