Health care products company Covidien PLC said Friday that it plans to spin off its pharmaceutical business as Mallincrkodt PLC in June.

Covidien said the separation will give both companies greater flexibility to focus on their respective growth strategies and potentially provide shareholders with greater value over the long term.

The company’s board has approved the separation of business and said Friday that it will declare a dividend to complete the transfer to Mallincrkodt. For every eight ordinary shares they hold, Covidien shareholders will receive one ordinary share of Mallinckrodt. Shareholders will receive cash in lieu of fractional shares.

The distribution is expected to occur on June 28, to shareholders of record as of June 19.

After the distribution, Mallincrkodt will operate independently as a publicly traded company, and Covidien will retain no ownership in the company. The new company will specialize in products used in diagnostic procedures and in the treatment of pain and related conditions.

Covidien said that its Mallinckrodt ordinary shares are expected to begin regular trading on July 1 on the New York Stock Exchange under the ticker symbol “MNK”. Covidien will continue to trade on the NYSE under the ticker symbol “COV”.

Shares of Covidien, based in Ireland, added 16 cents to reach $65.37 in afternoon trading.