Covidien has completed the separation of its Pharmaceuticals business, which is now held by Mallinckrodt plc, a new independent company. Mallinckrodt will begin “regular way” trading on the New York Stock Exchange today under the symbol “MNK.”
Covidien announced in December 2011 that it planned to spin-off its Pharmaceuticals business. The arguments was that while both businesses held industry-leading positions, they had distinctly different business models, sales channels, customers and capital requirements. In addition, their respective innovation pipelines differed substantially in length, regulatory approval requirements, possible risks and potential returns.
Covidien says the spin-off will enable both businesses to pursue their own strategic and operational plans, including setting optimal levels of investment in research and development and creating business-appropriate capital structures.
The distribution of Mallinckrodt ordinary shares occurred on June 28, 2013. In the distribution, Mallinckrodt issued one ordinary share for every eight Covidien ordinary shares held as of the close of business on June 19, 2013, the record date for the distribution.
“We wish our colleagues at Mallinckrodt continued success as they launch a new, independent specialty pharmaceuticals company focused on pain management and medical imaging diagnostics,” said José E. Almeida, Covidien Chairman, President and CEO. “Mallinckrodt has strong market positions based on its core strengths in manufacturing and pharmaceutical formulation.”
“Covidien is well positioned to deliver on its strategic initiatives, including broadening innovation focus, aggressively managing its portfolio, capitalizing on emerging markets opportunities and optimizing spending to provide for investments in innovation and growth,” said Mr. Almeida. “We are maintaining our long-term financial goals and continue to target top-line growth at or above the markets in which we compete.”