Kenvue, the consumer health company, is set to become a part of the S&P 500 index after Johnson and Johnson's exchange offer for Kenvue stock is finalized. According to S&P Dow Jones Indices, Johnson and Johnson (JNJ) took Kenvue public in May and is now offering investors an opportunity to exchange their stock for Kenvue shares. This exchange offer will expire on Friday, Aug. 18.
Upon the successful completion of the exchange offer, Kenvue will be added to the prestigious S&P 500 index. S&P Dow Jones Indices announced in a press release that the exact date of inclusion will be revealed later. J&J plans to exchange up to 1.7 billion Kenvue shares, equivalent to approximately a 90% stake, for its own stock.
The decision by S&P Dow Jones Indices to include Kenvue in the S&P 500 index is expected to drive increased investor participation in the exchange offer. This is because index funds now have a greater incentive to make the swap with the addition of Kenvue to the index. It's worth noting that indexers currently own more than 20% of J&J, a leading healthcare company worldwide. Kenvue boasts popular brands such as Listerine, Band-Aid, and Tylenol.
Given the expected oversubscription of the J&J offer, there may be a proration resulting in shareholders exchanging only a fraction of their shares for Kenvue.
In after-hours trading, Kenvue shares saw a rise of nearly 2% to $23.88 after experiencing a slight decrease of 0.1% to $23.35 during regular trading on Wednesday.