Cardinal Health Inc.'s (CAH) board approved the spinoff of
CareFusion Corp. and outlined plans for how the tax-free
transaction set for the end of next month will work.
The company first confirmed plans to spin of its faster-growing,
higher-margin clinical and medical-products units as a separate
public company last year. Cardinal Health's much larger, core
drug-distribution unit has been hurt by hospital-spending delays,
leading it to cut jobs and try to control costs.
Cardinal Health said Friday its board approved the spinoff after
determining both companies would benefit from more management focus
and sharper strategy. It had said last year it thought the breakup
would allow both companies to better focus on their specific
markets and have better growth prospects.
Under the spinoff, Cardinal Health will distribute at least 80%
of CareFusion's stock to its shareholders and keep the rest. The
company had already said the Internal Revenue Service has ruled the
deal will qualify as a tax-free one.
The distribution of CareFusion common shares will be made after
market hours on Aug. 31. Cardinal Health said CareFusion has
applied to have its common shares listed on the New York Stock
Exchange under the symbol CFN.
Meanwhile, earlier Friday, CareFusion said it would resume
shipping its Alaris personal-computer units and patient-controlled
analgesia products after a four-month hold amid a safety alert. It
recently received clearance from the Food and Drug Administration
for a software correction to new PC units.
Cardinal Health's shares were recently down 0.8% at $29.45.
-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353;
kerry.benn@dowjones.com