Oct 23, 2026 · 18 min · 11 segments
Crain's commercial real estate reporter Rachel Herzog joins host Jeanne Sparrow to discuss how State Street is…
Jeanne SparrowHost
Rachel HerzogGuest
Abbott Laboratories is spinning off its nutrition business into a new standalone company, a move winning early praise from Wall Street, but leaving a billion-dollar question unanswered.
Abbott chief executive Robert Ford says the split will create the world's largest pure-play nutrition company, while allowing Abbott's core healthcare and device business to accelerate sales and boost overall margins.
Analysts at J.P. Morgan and BTIG agree, noting the nutrition division has weighed down Abbott's overall growth in recent quarters.
However, as Crane's John Asplund reports, a major cloud hangs over the deal, lingering infant formula litigation.
That includes $385 million to resolve federal contamination investigations that triggered major product recalls in 2022, and another $670 million to settle thousands of lawsuits alleging its cow milk formulas caused a fatal intestinal disease in premature infants.
On a call with investors, CEO Ford did not clarify which company will inherit that liability, but insisted both entities will be well capitalized to handle future defense costs.
He added that resolving the lawsuits is not a requirement to complete the split.
Nathan Libby, a business professor at DePaul University, says that while past settlement costs are already baked into Abbott's market value, the unresolved pending cases remain a wild card.
Abbott Laboratories is spinning off its nutrition business into a new standalone company, a move winning early praise from Wall Street, but leaving a billion-dollar question unanswered.
Abbott chief executive Robert Ford says the split will create the world's largest pure-play nutrition company, while allowing Abbott's core healthcare and device business to accelerate sales and boost overall margins.
Analysts at J.P. Morgan and BTIG agree, noting the nutrition division has weighed down Abbott's overall growth in recent quarters.
However, as Crane's John Asplund reports, a major cloud hangs over the deal, lingering infant formula litigation.
That includes $385 million to resolve federal contamination investigations that triggered major product recalls in 2022, and another $670 million to settle thousands of lawsuits alleging its cow milk formulas caused a fatal intestinal disease in premature infants.
On a call with investors, CEO Ford did not clarify which company will inherit that liability, but insisted both entities will be well capitalized to handle future defense costs.
He added that resolving the lawsuits is not a requirement to complete the split.
Nathan Libby, a business professor at DePaul University, says that while past settlement costs are already baked into Abbott's market value, the unresolved pending cases remain a wild card.
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