Kimberly-Clark is buying Tylenol maker Kenvue in a cash and stock deal worth about $48.7 billion, creating a massive consumer health goods company.<\/p>\n
Shareholders of Kimberly-Clark will own about 54% of the combined company. Kenvue shareholders will own about 46% in what is one of the largest corporate takeovers this year. The deal must still be approved by the shareholders of both companies.<\/p>\n
The combined company will have a huge stable of household brands under one roof, putting Kenvue\u2019s Listerine mouthwash and Band-Aid side-by-side with Kimberly-Clark\u2019s Cottonelle toilet paper, Huggies and Kleenex tissues. It will also generate about $32 billion in annual revenue. <\/p>\n
Kenvue has spent a relatively brief period as an independent company, having been spun off by Johnson & Johnson<\/a> two years ago. J&J first announced in late 2021 that it was splitting its slow-growth consumer health division<\/a> from the pharmaceutical and medical device divisions. <\/p>\n Kenvue has since been targeted by activist investors unhappy about the trajectory of the company and Wall Street appeared to anticipate some heavy lifting ahead for Kimberly-Clark. <\/p>\n Kenvue\u2019s stock jumped 12% Monday afternoon, while shares of Kimberly-Clark, based outside of Dallas, slumped by nearly 15%.<\/p>\n Kenvue shares have shed nearly 50% of their value since approaching $28 in the spring of 2023. Morningstar analyst Keonhee Kim said Kenvue\u2019s volatile journey as a public company may have been driven in part by poor execution and a lack of experience operating as a stand-alone business.<\/p>\n He said the leadership of a more-established consumer products company like Kimberly-Clark could help unlock some of Kenvue\u2019s value.<\/p>\n He also noted that Kenvue brands include Neutrogena, Benadryl and other names that have been in store consumer health aisles for decades. Kim said he thinks Kimberly-Clark may have seen upside in adding those products.<\/p>\n \u201cI think that may have made the deal a lot more attractive … especially after the past couple of months of Kenvue\u2019s stock price decline,\u201d he said. <\/p>\n Kenvue and Tylenol have been thrust into the national spotlight this year as President Donald Trump and Health Secretary Robert F. Kennedy Jr. promoted unproven and in some cases discredited ties<\/a> between Tylenol, vaccines and the complex brain disorder autism<\/a>.<\/p>\n Trump then urged pregnant women<\/a> against using the medicine. That went beyond Food and Drug Administration advice that doctors \u201cshould consider minimizing\u201d the painkiller acetaminophen\u2019s use in pregnancy \u2014 amid inconclusive evidence about whether too much could be linked to autism. <\/p>\n Kennedy reiterated the FDA guidance during a press conference last week. He said that there isn’t sufficient evidence to link the drug to autism. <\/p>\n \u201cWe have asked physicians to minimize the use to when it’s absolutely necessary,\u201d he said.<\/p>\n Kenvue has continued to push back on the Trump administration’s public statements about Tylenol and acetaminophen, the active ingredient it contains. <\/p>\n \u201cWe strongly disagree with allegations that it does and are deeply concerned about the health risks and confusion this poses for expecting mothers and parents,” Kenvue said in a statement on its website. <\/p>\n The merger could face other hurdles. Citi Investment Research analyst Filippo Falorni said he is concerned about the deal\u2019s size given the recent history in the sector, particularly given the challenges faced by Kenvue.<\/p>\n In July, Kenvue announced that CEO Thibaut Mongon was leaving<\/a> in the midst of a strategic review, with the company under mounting pressure from activist investors unhappy about growth. Critics say Kenvue has relied too much on its legacy brands and failed to innovate. <\/p>\n