by
Gus Iversen, Editor in Chief | May 30, 2025
Medtronic has announced plans to separate its Diabetes Unit into a stand-alone public company, a move aimed at streamlining its operations and concentrating on higher-margin segments.
Medtronic reported that about 80% of the $2.75 billion it collected from Diabetes Unit sales during its 2025 fiscal calendar came from recurring sources — such as disposable equipment for its continuous glucose monitor systems and smart insulin pens, as well as software and service subscriptions.
The Galway, Ireland-based medtech firm said the decision to separate reflects a broader strategy to focus resources on growth areas where it holds strong market positions, such as cardiac ablation, renal denervation, and soft tissue robotics. According to Medtronic, the transaction is expected to be accretive to its gross and operating margins, as well as to adjusted earnings per share.
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The Diabetes Unit currently accounts for about 8% of Medtronic’s total revenue and 4% of segment operating profit. Post-separation, the new company will take with it the unit's global workforce of over 8,000 employees, its product portfolio, manufacturing capabilities, intellectual property, and existing strategic partnerships.
Que Dallara, executive vice president and president of Medtronic Diabetes, will assume the role of CEO of the newly formed company. “As we embark on this exciting new chapter, we celebrate the tireless efforts and dedication of our teams,” Dallara said in the announcement. “Together, we're poised to transform lives.”
Medtronic CEO Geoff Martha described the move as “a significant milestone” in the company’s portfolio management strategy, stating that it would enable a sharper focus on core areas with the highest growth potential.
The planned separation is expected to be tax-free for Medtronic shareholders under U.S. federal income tax rules. Financial advisors on the transaction include Goldman Sachs and BofA Securities, with legal support from Cleary Gottlieb, Baker McKenzie, Skadden Arps, and Davis Polk.
The company expects to complete the separation within 18 months, subject to regulatory and board approvals, and is targeting an initial public offering followed by a split-off.
