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6 hours ago
Kleenex maker Kimberly-Clark said on Monday it will buy Kenvue for more than $40bn in a landmark deal for the consumer sector, as the Tylenol maker grapples with White House scrutiny and choppy demand.
Kimberly-Clark would be scooping up the former Johnson & Johnson unit after months of struggles by Kenvue that include the ouster of its CEO in July and a share slump when Donald Trump in September asserted that Tylenol use can lead to autism, a claim not backed by conclusive research.
Last week, the US health and human services secretary, Robert F Kennedy Jr, acknowledged that there was no evidence proving Tylenol causes autism, but repeated his view that signs of a link between the two were “very suggestive”.
Apart from certain looming litigations against Tylenol, Kenvue is also facing lawsuits over claims that its baby powder products caused cancer, dampening investor sentiment.
Still, Kimberly-Clark expects about $2.1bn in annual cost savings from the acquisition, which it expects to close in the second half of 2026.
Set to be the largest buyout in the US consumer goods sector to date, the merger will give Kimberly-Clark access to Kenvue’s vast portfolio of brands from Listerine mouth wash and Band-Aid to skincare names like Aveeno and Neutrogena – with the combined company expected to bring in annual revenues of roughly $32bn.
The timing of the deal, although probable, was earlier than expected, given the negative litigation and regulatory headlines around Kenvue, RBC Capital Markets analyst Nik Modi said.
Sources in June told Reuters the strategic review of Kenvue’s operations could include a sale or breakup of the company that had been spun off from healthcare conglomerate Johnson & Johnson in 2023.
Kimberly-Clark is also navigating a consumer goods environment increasingly fraught with a more value-seeking shopper, forcing companies, including sector bellwether Procter & Gamble to invest in smaller pack sizes, and trim underperforming business units.
Kimberly-Clark sold a majority stake in its international tissue business to Brazilian pulp maker Suzano as part of a restructuring, proceeds from which are expected to help the Kenvue buyout, the company said on Monday.
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