Abbott Laboratories announced plans to split into two publicly traded companies -- one in diversified medical products and the other in research-based pharmaceuticals, marking a significant change in the company's 123-year history.

The Chicago-based diversified health products and pharmaceutical company will retain the Abbott name and keep its diversified medical products portfolio of generic pharmaceutical, devices, diagnostic and nutritional businesses, the company announced Wednesday.

The research-based pharmaceutical spin-off will cover Abbott's current portfolio of proprietary pharmaceuticals and biologics and will be renamed later.

Abbott's divestiture is far from the only one announced recently. Pfizer has announced plans to spin off its animal-health and nutritional products units and Kraft Foods plans to split into separate groceries and snacks businesses.

What happened here is the pharma piece got so big, and is so different, that these two investments make sense separately, and both are of a critical mass and size that they have great sustainability going forward as independent companies, Chairman and CEO Miles D. White told analysts during a conference call, The Associated Press reported.

Analysts agreed the move makes sense, given how the company has evolved into two separate businesses.

It makes sense for stockholders because it's a company with two very different risk profiles and investment propositions, Erik Gordon, a professor and analyst at the University of Michigan's business school, told AP.

Abbott said its diversified medical products division has about $22 billion in annual revenue and a durable mix of products across four major businesses, while its research-based pharmaceutical company has nearly $18 billion in annual revenue and a portfolio of brands including Humira, Lupron, Synagis, Kaletra, Creon and Synthroid.

White will remain as chairman and CEO of Abbott's diversified medical products company, while Richard A. Gonzalez will lead the research-based pharmaceutical firm, said Abbott. Gonzalez is the executive vice president of Global Pharmaceuticals, and previously held the positions of president and COO of Abbott.

The company expects to complete the split by the end of 2012.

The news helped push the company's shares up 2.27 percent in afternoon trading to $53.46, not far below their 52-week high.

Abbott also announced Wednesday third quarter earnings of $303 million, down from $891 million a year ago, partly due to a $1.5 billion pretax charge for legal reserves related to the Depakote investigation. Revenue increased 13 percent to $9.82 billion.