- Kenvue is under scrutiny after the Trump administration linked Tylenol to autism.
- Merger aims for $32 billion in annual revenue and $7 billion operating profit.
- The deal is expected to close in the second half of next year.
Kimberly-Clark, which owns Huggies and Kleenex, is acquiring Kenvue, the maker of Tylenol, in a cash and stock deal worth about $48.7 billion, according to news reports. The deal comes as Kenvue is fighting claims the Trump administration has made linking Tylenol to autism.
According to CBS News, Kenvue shareholders will receive $3.50 per share in cash and 0.14625 Kimberly-Clark shares for each Kenvue share held at closing. Based on the closing price of Kimberly-Clark shares on Friday, that amounts to $21.02 per share.
Once the companies are combined, Kimberly-Clark shareholders are expected to own about 54% of the company, while Kenvue shareholders will own about 46%.
This deal will merge two businesses that own a number of major consumer health brands. Along with Tylenol, Kenvue also owns Band-Aid, Benadryl, Listerine and Neutrogena.
“We will serve billions of consumers across every stage of life,” Kimberly-Clark CEO Mike Hsu said in a statement, per CBS. Hsu will serve as chairman and chief executive of the combined company.
In their announcement of the deal, company leaders said the two companies had “complementary strengths” and combining the two would accelerate growth, per BBC.
“With a broader product range and greater reach, the combined company will be a global health and wellness leader,” they said in the announcement.
It is expected that the deal will close in the second half of next year; it still needs approval from shareholders of both companies.
The new combined company will keep Kimberly-Clark’s headquarters in Irving, Texas, but will continue to have a significant presence in Kenvue’s locations.
Kenvue’s Tylenol has been in the spotlight recently after President Donald Trump and some U.S. health officials have claimed that the use of acetaminophen, Tylenol’s active ingredient, during pregnancy can be associated with an increased risk of autism, per The New York Times.
According to CBS, both Kenvue and a number of medical experts say Tylenol is safe.
Following Trump’s announcement, shares of Kenvue have plummeted, per The New York Times.
But after the announcement of the deal with Kimberly-Clark, Kenvue’s stock rebounded strongly, rising 20% in premarket trading. Kimberly-Clark’s shares dropped more than 10%, which, if continued, will take the company’s value down to a multiyear low.
In 2023, Kenvue was separated from Johnson & Johnson to run the group’s consumer products division. Johnson & Johnson kept the businesses in pharmaceuticals and medical devices that are more profitable and faster growing.
Under the new deal, the combined company is expected to generate about $32 billion in annual revenue and $7 billion in operating profit, company executives said, per The New York Times. In the three years after the companies combine, there are about $2 billion in “synergies” that could be achieved by cutting costs.