Kimberly-Clark’s acquisition is set to unite 10 billion-dollar brands under one roof, including Kenvue’s Aveeno and Neutrogena, expanding the company’s footprint in categories such as baby care, feminine care, and over-the-counter health products.
“Our combination with Kimberly-Clark unites two highly complementary portfolios filled with iconic, beloved brands and everyday essentials that people trust and count on throughout their lives,” said Kirk Perry, Chief Executive Officer of Kenvue, in the companies’ joint press statement.
Mike Hsu, Kimberly-Clark’s Chairman and CEO, said in the same press announcement that Kenvue brings unique strengths and is “uniquely positioned at the intersection of CPG and healthcare, with exceptional talent and a differentiated brand offering serving attractive consumer health categories.”
Building on existing momentum
Executives from both companies highlighted how the merger aligns with long-term goals. According to the companies’ joint Analyst Conference Call presentation on November 3, the new entity will be “a global health and wellness leader… with iconic brands engaging consumers across all stages of life.”
“We have built the foundation and this transaction is a powerful next step in our journey,” Hsu said in the release.
Sherilyn McCoy, Lead Independent Director at Kimberly-Clark, added during the presentation that, “together, these companies will serve billions of consumers and create a global leader positioned for the next 150 years.”
The combined company expects to leverage both firms’ capabilities in digital marketing, product development, and customer partnerships. According to the presentation, the business aims to “deliver superior science-backed, pioneering innovation” and “provide better solutions for consumers throughout every stage of life.”
Financial structure and cost efficiencies
By combining operations, Kimberly-Clark reported that the deal is expected to deliver $2.1 billion in combined annual efficiencies, including $1.9 billion in cost savings, which are forecast to be realized over a four-year period, with roughly $2.5 billion in one-time costs to achieve them.
Larry Merlo, Chair of Kenvue’s Board of Directors, said in the companies’ joint release that the deal followed a thorough strategic review. “We are pleased to have reached this agreement with Kimberly-Clark that delivers significant upfront value for our shareholders and substantial upside potential through ownership in the combined company,” he said.
Kenvue shareholders will receive $3.50 in cash and 0.14625 Kimberly-Clark shares per share they own, equating to a total value of $21.01 per share. After the transaction, Kimberly-Clark shareholders will hold roughly 54% of the merged company.
Kimberly-Clark said during its joint investor call that the combined business is expected to be “positioned for long-term sustainable value creation,” supported by a financial model focused on “top-tier adjusted operating profit” and “double-digit total shareholder return.”
What comes next
Before the deal is finalized, both companies must secure shareholder and regulatory approvals. Kimberly-Clark has already lined up financing, using a mix of cash on hand, new debt, and proceeds from the pending sale of a 51% stake in its International Family Care and Professional unit.
The release confirmed Mike Hsu will serve as CEO of the combined company, and three Kenvue directors will join the Kimberly-Clark board. The headquarters will remain in Irving, Texas, and Kimberly-Clark said it will maintain a strong presence in Kenvue’s existing locations.
The investor presentation emphasized that the combined portfolio and global reach position the new entity to “build the future of consumer-centric care for all.”
