Covidien, which is based in Dublin but has its operational headquarters in Massachusetts, ranks as one of the world's largest producers of acetaminophen and a top 10 generic manufacturer in the U.S. based on prescriptions. Without the pharmaceuticals unit, which generates about $2 billion in annual sales, Covidien would be a standalone medical device and supply company with $9.6 billion in revenue.

Company officials in a statement announcing the split said the transaction would give both businesses greater flexibility to pursue growth strategies. Covidien CEO José E. Almeida said the company has been evaluating whether to separate the businesses for several years due to differences in 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," Almeida said. "While both businesses hold industry-leading positions, they have distinctly different business models, sales channels, customers, capital requirements and talent bases.

"In addition, their respective innovation pipelines differ substantially in length, regulatory approval requirements, possible risks and potential returns."

Covidien said the split will take the form of a tax-free distribution of the pharmaceutical company to shareholders. The deal is subject to regulatory and other approval and is expected to be completed within 18 months.

Shares of the company traded up more than 3%, or $1.34, to $43.50, on Thursday morning.

Covidien is no stranger to splits. The company was created in 2007 as part of the breakup of Tyco, a high-flying conglomerate that branched into telecom, electronics, security and healthcare before it collapsed in scandal. CEO Dennis Kozlowski was convicted of fraud and is serving an 8-to-25-year sentence.

The legacy Tyco business has continued to break apart in the years since. The company said in September it intends to divide its ADT North America security operation, flow-control products and fire and security products business into three publicly traded companies.