Johnson & Johnson to keep a 9.5% stake in consumer health spinoff Kenvue stake after exchange offer

After Johnson & Johnson initiated a share-exchange offer to significantly reduce its holdings in Kenvue, the company says it's keeping about a 9.5% stake in the consumer health spinoff.

The exchange offer, unveiled on July 24, expired on August 18 and let J&J shareholders trade some of their J&J holdings in exchange for Kenvue shares.

Kenvue debuted on the New York Stock Exchange in early May for $22 per share, representing the largest IPO in U.S. markets in more than a year, CNBC reported

When J&J announced its exchange offer in July, the company owned roughly 1.7 billion shares of Kenvue stock, representing about 90% of ownership in the company. The company offered to trade up to 1.54 billion of those Kenvue shares in exchange for outstanding J&J shares at a 7% discount.

Now, J&J says the deal was oversubscribed. Only around 23.8% of tendered J&J shares will end up exchanged for Kenvue shares, the drugmaker said. The company plans to reveal the official results from the deal later this week.

The deal was estimated to be valued at around $36 billion based on Kenvue’s share price of nearly $24, which is where it still stands on Monday. The separation is intended to “further sharpen” J&J’s focus on “transformational innovation” in its main business in pharma and medtech, CEO Joaquin Duato said in a statement at the time.

Kenvue, which sells popular consumer health brands Neutrogena, Aveeno, Tylenol, Listerine, Band-Aid and Zyrtec, among others, is so far doing well for itself. During the second quarter, the newly established company brought in sales of $4 billion, a 5.4% increase from last year’s second quarter under J&J’s wing.