Abbott will spin off its $8.5 billion Similac and Ensure business and cut its sales outlook

Abbott (NYSE: ABT) said Wednesday it intends to separate its Nutrition business into an independent, publicly traded company, with completion expected by the end of 2027. In the announcement filed with the SEC, the company described a business with about $8.5 billion in annual sales, about 16,000 employees and 14 manufacturing sites. The brands include Similac, PediaSure, Pedialyte, Glucerna and Ensure. At 9:51 AM ET Abbott shares were at $102.66, up 0.2% from Tuesday's close of $102.45, according to Nasdaq quote data.

How the split works

Abbott plans a distribution of the new company's shares to its own shareholders, intended to be tax-free for U.S. federal income tax purposes. Holders would end up owning both stocks. Abbott says the combined dividend from the two companies is expected to equal Abbott's dividend at the time of separation. The deal still needs regulatory approvals, an effective Form 10 registration statement and final board approval. Daniel Salvadori, who runs Established Pharmaceuticals and Nutritional Products, would become chief executive of the new company. Abbott said one-time separation charges will be quantified later.

After the split, Abbott says it would have about $42 billion in sales, concentrated in medical devices, diagnostics and established medicines.

The number behind the number: Nutrition was shrinking until this quarter

Abbott's third-quarter results, filed the same morning, show why the segment is a candidate for a split. Nutrition sales were $2,262 million in the quarter, up 5.1% reported, about 17% of Abbott's $13,013 million total. But over the first nine months, Nutrition is down 1.3% reported and 2.1% on a comparable basis, and U.S. Nutrition is down 4.5% ($2,673 million).

In July, Abbott attributed the second-quarter decline to lower volumes and strategic pricing actions taken in the fourth quarter of 2025, and said those actions plus new products were improving performance. The third quarter is the first sign in these filings that the turn happened. It is one quarter, and the nine-month figure is still negative.

The cut that got less attention

The headline on the split overshadows a guidance change. In July, Abbott guided to 2026 comparable sales growth of 6.5% to 7.5%. The Q3 release says approximately 6.0%, below the bottom of the old range. Adjusted EPS guidance was narrowed to $5.50 to $5.55 from $5.45 to $5.60, which keeps the midpoint at $5.525. Third-quarter adjusted EPS of $1.42 landed inside the $1.38 to $1.46 range Abbott gave in July, and it guided fourth-quarter adjusted EPS to $1.62 to $1.67.

The release does not spell out which businesses drive the lower sales view, so we are not guessing at it. What the filings do show is that third-quarter comparable growth was 7.0% overall, and that nine-month comparable growth is 5.2%, so the year's number depends on the fourth quarter. Abbott also says the separation will not change its 2026 guidance, or the 2027 guidance it plans to give in January.

What to watch

• The Form 10 for the Nutrition company, which will show its stand-alone margins, debt and costs, none of which Abbott has published yet.
• Whether Nutrition holds growth near the third quarter's pace, or falls back toward its nine-month trend.
• The one-time charges Abbott says it will quantify later.
• The January 2027 guidance for the smaller Abbott.

The shares are about 22% below their 52-week high of $132.02, with a market value of roughly $177.6 billion, per Nasdaq. Spin-offs are announced often with the promise of "unlocking value"; whether either piece trades better on its own is a question the market answers over time, not on the day of the announcement.

Sources: Abbott 8-K filings on SEC EDGAR (Oct. 21 and July 16, 2026); Nasdaq quote data at 9:51 AM ET; Reuters and WSJ headlines on the announcement. Some data may be delayed. This is market information, not investment advice.