Johnson & Johnson also announced  that, in connection with the planned split-off, it has received a waiver of the 180-day lock up with respect to the shares of Kenvue common stock held by it from the joint lead book-running managers of the IPO.

“The separation of Kenvue further sharpens Johnson & Johnson’s focus on transformational innovation specifically in Pharmaceutical and MedTech,” said Joaquin Duato, Chairman and Chief Executive Officer of Johnson & Johnson. “We believe now is the right time to distribute our Kenvue shares, and we are confident that a split-off is the appropriate path forward to bring value to our shareholders.”

The exchange offer will permit Johnson & Johnson shareholders to exchange some, all or none of their shares of Johnson & Johnson common stock for shares of Kenvue common stock at a 7% discount, subject to an upper limit of 8.0549 shares of Kenvue common stock per share of Johnson & Johnson common stock tendered and accepted in the exchange offer. If the upper limit is not in effect, tendering shareholders are expected to receive approximately $107.53 of Kenvue common stock for every $100 of Johnson & Johnson common stock tendered.

Johnson & Johnson will determine the prices at which shares of Johnson & Johnson common stock and shares of Kenvue common stock will be exchanged by reference to the arithmetic average of the daily volume-weighted average prices of shares of Johnson & Johnson common stock and Kenvue common stock on the NYSE during the three consecutive trading days ending on and including the second trading day preceding the expiration date of the exchange offer, which are expected to be August 14, 15 and 16, 2023, if the exchange offer is not extended or terminated. The final exchange ratio, reflecting the number of shares of Kenvue common stock that tendering shareholders will receive for each share of Johnson & Johnson common stock accepted in the exchange offer, will be announced by press release by 9:00 a.m., New York City time, on the trading day immediately preceding the expiration date of the Exchange Offer (which expiration date, if the Exchange Offer is not extended or terminated, would be August 18, 2023). The final exchange ratio, when announced, and a daily indicative exchange ratio beginning on the third trading day of the exchange offer period, also will be available at www.JNJSeparation.com.

The completion of the exchange offer is subject to certain conditions, including: at least 460,149,135 shares of Kenvue common stock being distributed in exchange for shares of Johnson & Johnson common stock validly tendered in the exchange offer; and the receipt of an opinion of counsel that the exchange offer will qualify for tax-free treatment to Johnson & Johnson and its participating stockholders.

Johnson & Johnson currently owns 1,716,160,000 shares of Kenvue common stock, representing approximately 89.6% of the total outstanding shares of Kenvue common stock. Johnson & Johnson is offering to exchange up to 1,533,830,450 shares of Kenvue common stock for outstanding shares of Johnson & Johnson common stock in the exchange offer. If the exchange offer is consummated but not fully subscribed, Johnson & Johnson intends to make a tax-free distribution to its shareholders of the shares of Kenvue common stock that were offered but not exchanged in the exchange offer effected as a dividend on a pro rata basis to holders of Johnson & Johnson common stock as of the record date. The record date for the clean-up spin-off, if any, is expected to be seven business days following the expiration date of the exchange offer.

The exchange offer is voluntary for Johnson & Johnson shareholders. No action is necessary for Johnson & Johnson shareholders who choose not to participate.

The terms and conditions of the exchange offer will be outlined in a registration statement on Form S-4 to be filed by Kenvue with the Securities and Exchange Commission (“SEC”) and a tender offer statement on Schedule TO to be filed by Johnson & Johnson with the SEC today.

Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC will serve as dealer managers for the exchange offer.