\n<\/p>\n
Kimberly-Clark is laying down $40bn to buy Kenvue in a massive deal that has puzzled some investors, as the maker of Tylenol struggles with weak sales, lawsuits and White House attacks linking its painkiller to autism.<\/p>\n
Shares of Kimberly-Clark dropped sharply after the Monday announcement as stockholders scrutinised the 46 percent premium being paid for the former Johnson & Johnson unit that has had a turbulent year.<\/p>\n list of 4 items<\/span>end of list<\/span><\/section>\n Kenvue ousted its CEO in July, and has been under fire from United States President Donald Trump over unproven claims that Tylenol use during pregnancy can cause autism in children.<\/p>\n Kenvue shares, which had dropped sharply since Trump\u2019s comments, jumped 17.5 percent on Monday. Many investors have been awaiting a sale of all or parts of the company for months, following activist pressure.<\/p>\n Jay Woods, chief market strategist at Freedom Capital Markets, said the market reaction suggests\u00a0some investors\u00a0believe Kimberly-Clark \u201cmay be buying damaged goods\u201d.<\/p>\n Despite the concerns, Kimberly-Clark forecast $2.1bn in annual cost savings from the deal, with the addition of Kenvue\u2019s vast portfolio of brands from Listerine mouthwash to skincare names like Aveeno and Neutrogena expected to bring in annual revenues of roughly $32bn for the combined company.<\/p>\n \u201cBoth companies sit side by side on store shelves, so the scale and distribution logic make sense even if the Tylenol overhang remains a shadow any buyer would rather avoid,\u201d said Kimberly Forrest, chief investment officer at Bokeh Capital Partners.<\/p>\n \u201cKimberly-Clark will take on potential litigation risk for the Tylenol brand\u2026 This is hard to quantify,\u201d said TD Cowen analyst Robert Moskow.<\/p>\n There are concerns around\u00a0Kenvue\u2019s\u00a0potential legal exposure to hundreds of private lawsuits alleging the company hid supposed links between Tylenol and autism or attention deficit hyperactivity disorder in children.<\/p>\n While US Health and Human Services Secretary Robert F Kennedy Jr recently said there is no conclusive evidence of such a link, he called existing data \u201cvery suggestive\u201d.<\/p>\n US sales of Tylenol fell 11 percent between September 20 and October 4 after Trump\u2019s remarks, BNP Paribas analyst Navann Ty said in a note last month.<\/p>\n Kenvue is also battling litigation tied to its talc-based baby powder products.<\/p>\n \u201cMost investors expected Kenvue to sell off select brands, not the entire company, given the Tylenol and talc overhangs. But Kimberly-Clark likely saw long-term value in a strong brand portfolio trading at a steep discount,\u201d said James Harlow, senior vice president at Novare Capital Management.<\/p>\n Kenvue\u00a0investors\u00a0cheered the deal.<\/p>\n One long-term investor who has spoken with the board and management over the last months called the deal \u201cawesome\u201d, while some\u00a0others\u00a0said\u00a0the price was not as good as they would have hoped for two months ago, before the company came under fire from the White House.<\/p>\n Kenvue has long struggled with weakness in its core businesses, especially the skin health and beauty segment, and has previously had investor activism. The company said on Monday that third-quarter sales at the skin health segment fell 3.2 percent to $1.04bn.<\/p>\n \u201cOne of our challenges at Kenvue right now is we\u2019re living in between, which is no place to live \u2013 in the murky middle,\u201d said Kirk Perry, who was named CEO of Kenvue earlier in the day.<\/p>\n Kimberly-Clark is also navigating a consumer goods environment increasingly fraught with a more value-seeking shopper \u2013 forcing companies, including sector bellwether Procter & Gamble, to invest in smaller pack sizes and trim underperforming business units.<\/p>\n It\u00a0sold 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.<\/p>\n Still, some analysts said it reflects a changing deal environment. \u201cThis validates how easing rate expectations are fueling large, transformational mergers,\u201d\u00a0Bokeh Capital\u2019s\u00a0Forrest\u00a0said.<\/p>\n Kenvue\u2019s shareholders will receive $3.50 per share and 0.15 Kimberly-Clark shares for each Kenvue share held. That implies an equity value of $40.32bn, according to calculations by the Reuters news agency.<\/p>\n The deal, expected to close in the second half of 2026,\u00a0will be financed through a mix of cash and debt, with committed funding from JPMorgan Chase Bank.<\/p>\n Either party may be required to pay a $1.12bn termination fee in cash if the deal falls through, according to a regulatory filing.<\/p>\n Upon closing, Kimberly-Clark\u2019s CEO Mike Hsu will take over as the top boss and chairman of the combined company.<\/p>\n<\/div>\n Kimberly-Clark is laying down $40bn to buy Kenvue in a massive deal that has puzzled some investors, as the maker of Tylenol struggles with weak sales, lawsuits and White House attacks linking its painkiller to autism. Shares of Kimberly-Clark dropped sharply after the Monday announcement as stockholders scrutinised the 46 percent premium being paid for […]<\/p>\n","protected":false},"author":1,"featured_media":991,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-990","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-us-canada-news"],"_links":{"self":[{"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/posts\/990","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=990"}],"version-history":[{"count":0,"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/posts\/990\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/media\/991"}],"wp:attachment":[{"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Recommended Stories <\/h2>\n
Tylenol headaches<\/h2>\n
\u2018Awesome\u2019 for Kenvue<\/h2>\n
Sector struggles<\/h2>\n
Going for over $40bn<\/h2>\n
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