Medtronic is spinning off its diabetes business into standalone company
Medtronic announced Wednesday that it will spin off its diabetes business into a standalone company.
The medical device giant, which is domiciled in Dublin, Ireland but has its main office in Fridley, Minnesota, confirmed that it is making the "strategic decision" to split off its diabetes arm to "create a more focused Medtronic, more simplified portfolio in high margin growth markets."
The diabetes business currently employs 8,000 people and generates annual sales of around $2.5 billion, representing 8% of Medtronic revenue albeit only 4% of its operating profit. The split is anticipated to increase Medtronic's profit margins.
The Wall Street Journal reports the move will allow the company to "focus on its more-profitable segments making devices for cardiovascular, neuroscience and medical surgery."
While its diabetes business has been growing at a strong pace, it comes after a period of recovery when its MiniMed insulin pumps suffered product safety issues that sparked a warning from the Food and Drug Administration, and led to a delay in FDA clearance of MiniMed 780G pump, the Journal notes.
The announcement came on a day the company said the tariff war enacted by the Trump administration could cost it between $200 million and $350 million over fiscal year 2026.
The new company will be led by current Medtronic Diabetes president Que Dallara, and will be based in California, where Medtronic's diabetes business is currently located.
"This marks a significant milestone in driving both Medtronic and the Diabetes business to achieve lasting value for Medtronic, our shareholders, customers, and patients," said Geoff Martha, chairman and CEO of Medtronic.
"Active portfolio management is an important lever to delivering on our ongoing growth and success, and this decision shifts the Medtronic portfolio to have intense focus on our highest margin growth drivers where we have our strongest core competencies. I'm also excited about what the future holds for the Diabetes business. Que's impressive track record in driving growth and innovation has set Diabetes on a path to continued success, ensuring the needs of individuals with diabetes are met around the globe."
The spinoff is expected to be completed in 18 months.
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