Medtronic has announced its plan to separate its Diabetes business into a standalone, publicly traded company within the next 18 months. The new entity, referred to as "New Diabetes Company," will focus entirely on insulin management solutions, including automated insulin delivery and Smart MDI. Medtronic expects to execute the separation through an initial public offering followed by a split-off transaction. This move is intended to simplify Medtronic’s portfolio and concentrate on higher-margin sectors while enabling the Diabetes business to focus on specialized growth and investment. Que Dallara, current President of Medtronic Diabetes, will serve as CEO of the new company.
Geoff Martha, Chairman and CEO of Medtronic, said, "Active portfolio management is an important lever to delivering on our ongoing growth and success, and this decision shifts the Medtronic portfolio to have intense focus on our highest margin growth drivers where we have our strongest core competencies. I'm also excited about what the future holds for the Diabetes business. Que's impressive track record in driving growth and innovation has set Diabetes on a path to continued success, ensuring the needs of individuals with diabetes are met around the globe." The transaction is designed to be tax-free for shareholders in the U.S., and the company intends to maintain its dividend policy. Medtronic’s strategic advisors for this transaction include Goldman Sachs and BofA Securities, with legal and tax counsel provided by several leading law firms.
