Baxter International Inc., the world's second-biggest maker of medical products, said it will spin off its large cardiovascular division to shareholders next year to make it more aggressive in a highly competitive industry.
The move, approved Sunday by Baxter's board in Deerfield, Ill., will create one of the largest cardiovascular businesses in the country.
The new Irvine-based firm, as yet unnamed, makes the world's best-selling tissue heart valves and is expected to generate nearly $1 billion in revenue this year.
Investors greeted the news of the spinoff by snapping up Baxter stock. The shares rose $3.31, or 5%, to $64.19 in heavy trading on the New York Stock Exchange.
The new business will be able to grow more quickly on its own, Chief Executive Harry Kraemer said.
Michael Mussallem, head of the company's cardiovascular business, will become chief executive of the new firm.