Covidien is a health care company that was spun off from Tyco International in 2007.  The company began as Tyco Healthcare, but after Tyco’s chief executive, L. Dennis Kozlowski, was embroiled in a major scandal that led to his conviction for fraud, his successor started to separate the company’s businesses, believing that they were worth more as separate entities than as a large corporation.  Covidien held the company’s health care businesses.

José E. Almeida, the chief executive of Covidien, said, “We’ve evaluated whether to separate these businesses for several years, due to the major differences between the medical products and pharmaceutical industries.  We believe that now is the right time to do so because we have significantly improved the operations, performance and pipeline of our pharmaceuticals business.”

Covidien’s performance has been mixed as an independent company.  The pharmaceutical unit has been a drag on earnings.  Covidien attempted to sell the pharmaceutical unit to another health care company, but those talks reportedly broke down.  Covidien expects the spin off of the pharmaceutical unit to take up to 18 months.

Approximately two-thirds of the pharmaceutical unit’s products are sold in the United States.  Covidien’s remaining medical products business would have annual revenue totaling around $9.6 billion.  Covidien products include medications, like acetaminophen, as well as surgical supplies and radioactive isotopes used in medical procedures.

Mr. Almeida said on a conference call with analysts that spinning off the unit would allow the rest of the company to flourish.  Covidien has 41,000 employees worldwide.