WASHINGTON (dpa-AFX) - Kimberly-Clark Corp. (KMB) Thursday said it plans to pursue a potential tax-free spin-off of its health care business, as part of efforts by the health care products maker to boost shareholder value and focus more on its consumer and professional brands. Shares of Kimberly-Clark gained about five percent in the extended trading hours, following the news.
The spin-off would create a stand-alone, publicly traded health care company with annual net sales of about $1.6 billion, the company said in a statement. The separated business would focus on surgical and infection prevention products, and medical devices for pain management, respiratory and digestive health.
Chief Executive Thomas Falk said, 'While K-C Health Care has been part of our company since the 1970's, its strategic fit and growth priorities have changed over time and we now think that pursuing a spin-off makes sense for our shareholders.'
'A spin-off would also allow us to further sharpen our focus on our consumer and K-C Professional brands,' Falk added.
Robert Abernathy, currently Kimberly-Clark Group President - Europe, Global Nonwovens, and Continuous Improvement and Sustainability, will become CEO of the newly separated health care company if the spin-off ultimately occurs.
Kimberly-Clark's management will continue to analyze a potential spin-off and expects to make a final recommendation to the board of directors in the next several months, the company said. If the board proceeds with the plan, the spin-off would likely be completed by third quarter of 2014.
KMB closed Thursday's regular trade at $109.71, up $0.87 or 0.80%, on the NYSE. The stock further gained $5.29 or 4.82% in after hours.
Copyright RTT News/dpa-AFX
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