Cardinal Health Board OKs CareFusion Spinoff, Set For Aug 31

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; [e-mail]