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Baxter to spin off heart unit
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July 12, 1999: 11:10 a.m. ET
Medical products maker sees more growth by paring off $1B business
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NEW YORK (CNNfn) - Baxter International Inc. said Monday it plans to spin off its cardiovascular products business, which posts sales of about $1 billion a year for the medical products maker.
The spin-off will create a new publicly traded company, which hasn't yet been named, that could be a buyer of other heart products makers. Baxter, for its part, will continue to focus on therapies for patients with life-threatening conditions.
"The spin-off will accelerate our cardiovascular business' speed of innovation, make a significant contribution to our product development pipeline, and ultimately lead to more and improved treatment options for patients suffering from advanced cardiovascular disease," said Michael Mussallem, a Baxter group vice president who will become chief executive officer of the new company, in a statement.
"And, as an independent company, we will be a more aggressive competitor, which I believe will accelerate our future growth rate," said Mussallem.
Distribution of stock in the spin-off, which is planned as tax-free to shareholders, is expected to take place in the first half of next year.
Baxter said more than 70 percent of its cardiovascular products are leaders in their markets. The spin-off, which will have about 6,000 employees, will be based in Irvine, Calif.
Shares of Baxter (BAX), a Deerfield, Ill.-based leader in blood therapies, drug delivery and renal therapy with some 42,000 employees, rose 1-7/16 to 60-7/8 Friday on the New York Stock Exchange.
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Baxter International
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