by Christopher Freeburn | November 15, 2013 8:56 am
Shares of Kimberly-Clark (KMB) surged almost 3% in Friday pre-market trading after the company said it plans to separate its health care unit.
KMB’s medical products business manufactures a variety of health care-related items, including catheters, surgical masks and sterile bandages. The unit generates about $1.6 billion in annual sales, 70% of which are made in North America. The company said the spin-off would be a tax-free transaction, Bloomberg noted.
Comprising 7.7% of KMB’s total sales last year, the health care unit posted a 4% gain in sales in the most recent quarter. KMB’s European group president, Robert Abernathy, will become CEO of the health care business when it becomes a separate, publicly-traded company.
After the spin off, KMB management will refocus on its core consumer products business.
Last year. KMB reported overall sales of $21.1 billion.
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