Medtronic’s US$2.8B diabetes unit to become independent company

IRELAND—Medtronic, the global medical-device maker headquartered in Galway, Ireland, and operating out of Minneapolis, has announced plans to separate its diabetes business into an independent, publicly traded company.

This strategic move aims to create a focused diabetes entity while allowing Medtronic to concentrate on its higher-margin, faster-growing segments such as cardiovascular, neuroscience, and surgical devices.

The diabetes division, which generated nearly US$2.8 billion in sales in the fiscal year ending April 2025—a 10.7% increase from the previous year—is currently home to about 8,000 employees worldwide and is headquartered in Northridge, California.

The new company will be led by Que Dallara, who has headed Medtronic’s diabetes business since 2022.

Medtronic’s CEO, Geoff Martha, explained that the separation will enable the diabetes unit to receive the dedicated focus and investment it needs to realize its full potential, which Medtronic as a broader company cannot provide.

Meanwhile, Medtronic will sharpen its focus on its core strengths in higher-margin markets, including innovative technologies like pulsed-field ablation for treating irregular heartbeats and devices for hypertension management.

These segments offer better profitability and align more closely with Medtronic’s expertise.

The diabetes business primarily sells wearable and disposable devices directly to patients, including the MiniMed insulin pumps and smart insulin pens that connect with smartphones.

These products form part of a comprehensive insulin management ecosystem, which Medtronic claims will make the new standalone company uniquely positioned in the diabetes market.

The division has rebounded after regulatory challenges; notably, the FDA delayed clearance of the MiniMed 780G insulin pump until 2023 due to safety concerns raised in 2021.

Since then, the division has reported consecutive quarters of double-digit growth.

Looking ahead, the new diabetes company plans to launch next-generation insulin pumps and smart pens and is collaborating with Abbott to develop an integrated glucose sensor compatible with its devices.

This partnership leverages Abbott’s FreeStyle Libre technology, enhancing continuous glucose monitoring for patients.

Medtronic expects the separation to be completed within 18 months through a series of capital market transactions, with a preferred route involving an initial public offering (IPO) followed by a split-off.

 The move is anticipated to be tax-free for shareholders and is designed to unlock value for both Medtronic and the new diabetes company.

Following the announcement, Medtronic’s shares experienced a slight dip of about 1% in afternoon trading, although the stock has risen over 7% year-to-date and more than 2% over the past year.

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