Kimberly-Clark is shopping for Tylenol maker Kenvue in a money and inventory deal value about $48.7 billion, creating a large shopper well being items firm.
Shareholders of Kimberly-Clark will personal about 54% of the mixed firm. Kenvue shareholders will personal about 46% in what is without doubt one of the largest company takeovers this yr.
The mixed firm could have an enormous steady of family manufacturers underneath one roof, placing Kenvue’s Listerine mouthwash and Band-Help side-by-side with Kimberly-Clark’s Cottonelle bathroom paper, Huggies and Kleenex tissues. It is going to additionally generate about $32 billion in annual income.
Kenvue has spent a comparatively transient interval as an impartial firm, having been spun off by Johnson & Johnson two years in the past. J&J first introduced in late 2021 that it was splitting its slow-growth shopper well being division from the pharmaceutical and medical gadget divisions.
Kenvue has since been focused by activist buyers sad concerning the trajectory of the corporate and Wall Road appeared to anticipate some heavy lifting forward for Kimberly-Clark.
Shares of Kimberly-Clark, based mostly simply exterior Dallas, slumped 13% Monday. Kenvue’s inventory jumped greater than 15%.
Kenvue and Tylenol have been thrust into the nationwide highlight this yr as President Trump and Well being Secretary Robert F. Kennedy Jr. promoted unproven and in some instances discredited ties between Tylenol, vaccines and the complicated mind dysfunction autism.
Trump then urged pregnant ladies towards utilizing the medication. That went past Meals and Drug Administration recommendation that medical doctors “ought to think about minimizing” the painkiller acetaminophen’s use in being pregnant — amid inconclusive proof about whether or not an excessive amount of might be linked to autism.
Kennedy reiterated the FDA steerage throughout a information convention final week. He mentioned that there isn’t enough proof to hyperlink the drug to autism.
“We have now requested physicians to reduce the use to when it’s completely vital,” he mentioned.
Kenvue has continued to push again on the Trump administration’s dialogue.
“Nothing is extra vital to us than the well being and security of the individuals who use our merchandise,” Kenvue mentioned in a press release on its web site. “We consider impartial, sound science clearly reveals that taking acetaminophen doesn’t trigger autism. We strongly disagree with allegations that it does and are deeply involved concerning the well being dangers and confusion this poses for anticipating moms and fogeys.”
In July, Kenvue introduced that CEO Thibaut Mongon was leaving within the midst of a strategic overview with the corporate underneath mounting strain from activist buyers.
Kimberly-Clark Chairman and CEO Mike Hsu can be chairman and CEO of the mixed firm. Three members of the Kenvue’s board will be a part of Kimberly-Clark’s board at closing. The mixed firm will preserve Kimberly-Clark’s headquarters in Irving, Texas, however there can be important operations round Kenvue services and places as effectively.
The deal is anticipated to shut within the second half of subsequent yr. It nonetheless wants approval from shareholders of each each firms.
Kenvue shareholders will obtain $3.50 per share in money and 0.14625 Kimberly-Clark shares for every Kenvue share held at closing. That quantities to $21.01 per share, based mostly on the closing value of Kimberly-Clark shares on Friday.
Kimberly-Clark and Kenvue mentioned that they recognized about $1.9 billion in price financial savings which might be anticipated within the first three years after the transaction’s closing.
Chapman writes for the Related Press.
