Global healthcare major Johnson & Johnson and electronics giant Toshiba’s announcements on Friday to split businesses could further dent the future of big conglomerates, coming on the heels of General Electric’s (GE) split into three companies. Johnson & Johnson will split into two companies to separate its consumer business from its medical device and prescription drug business.

“Following a comprehensive review, the board and management team believe that the planned separation of the consumer health business is the best way to accelerate our efforts to serve patients, consumers, and healthcare professionals, create opportunities for our talented global team, drive profitable growth, and – most importantly – improve healthcare outcomes for people around the world,” CEO Alex Gorsky said in a statement.

In next two years, Johnson & Johnson to split into two companies

Toshiba’s split into three companies will see the conglomerate spinning off its energy infrastructure and electronic devices businesses. The third company will keep the Toshiba name and manage its 40% stake in memory chip maker Kioxia.

Just like GE, Toshiba has been under intense pressure to enhance shareholder value. GE’s most profitable unit focussed on aviation will keep the conglomerate’s name with spinoff plans for both the healthcare and energy units by early 2024. “It’s over now,” said Nick Heymann of William Blair, who has followed GE for years. “In a digital economy, there’s no real room for it.”

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The split was well received Tuesday in the markets with General Electric Co. shares reaching a year-long high of $111.29 after gaining $2.87, or 2.7%.

German industrial conglomerate Siemens spun off its power division to form Siemens Energy last year.

DuPont, an American chemical conglomerate, was split into three publicly traded companies within 18 months of merger, with focuses on agriculture (Corteva), materials science (Dow Inc.), and specialty products (DuPont).

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Following the GE split announcement, global investment bank RBC Capital Markets said the decision could set into motion similar actions at other large conglomerates with the “urge to demerge.”

Emerson, Roper Technologies, and 3M, have underperformed the S&P 500 in 2021.

(With AP inputs)