Copyright CNBC
Kimberly-Clark announced Monday it's struck an agreement to buy Kenvue in a deal valued at $48.7 billion that would create a consumer staples giant. The deal is a combination of cash and stock. Shares of Kenvue surged 20% in premarket trading Monday, while shares of Kimberly-Clark plunged 14%. The combined company would bring together brands like Huggies and Kleenex with the likes of Band-Aid and Tylenol. It would include 10 billion-dollar brands, the companies said in a news release. The acquisition would be one of the largest on Wall Street this year. The transaction is expected to close in the second half of 2026. Kimberly-Clark Chairman and CEO Mike Hsu said in a statement that the companies share a "commitment to developing science and technology to provide extraordinary care." "Over the last several years, Kimberly-Clark has undertaken a significant transformation to pivot our portfolio to higher-growth, higher-margin businesses while rewiring our organization to work smarter and faster," Hsu said. "We have built the foundation and this transaction is a powerful next step in our journey." Kenvue, a portfolio of consumer health brands, spun out of Johnson & Johnson in May 2023. Since then, shares have fallen almost 35% from their initial public offering price. As of Friday's close, Kenvue traded at about $14 per share for a market cap of roughly $27 billion. Kenvue Chair Larry Merlo said in a statement that following a comprehensive strategic review, the board is "confident this combination represents the best path forward for our shareholders and all other stakeholders." Three Kenvue board members will join the Kimberly-Clark board upon the deal's closing. Hsu will continue to serve as CEO. The combined company would generate estimated 2025 annual net revenues of roughly $32 billion and adjusted EBITDA of approximately $7 billion, according to the release. Kimberly-Clark and Kenvue expect about $1.9 billion in cost synergies from the transaction to be realized in the first three years following the deal's close.
