Kimberly-Clark plans spinoff of healthcare business

Kimberly-Clark has announced it is considering the potential spinoff of its healthcare business, which sells surgical and infection prevention products and medical devices.

The company's board of directors has authorised its management to pursue a potential tax-free spinoff of the division, creating a standalone healthcare company with annual net sales of around $1.6 billion (990.1 million pounds).

Robert Abernathy – the firm's European president for nonwovens and continuous improvement and sustainability – will become chief executive officer of the new business if the spinoff occurs, while current healthcare head Joanne Bauer will play a key role in the transition before retiring upon its completion.

Although the healthcare business has been part of Kimberly-Clark since the 1970s, the organisation now wishes to pursue a different strategic direction.

Chairman and chief executive officer Thomas Falk said: "This announcement is further evidence of our focus on creating shareholder value and how we use portfolio management to run our company."

During the third quarter of 2013, Kimberly-Clark as a whole achieved a net sales total of $5.3 billion, with organic sales rising by five percent year on year.