Big Moves in the Consumer Goods World: Kimberly-Clark Takes Over Kenvue

A Major Move in Consumer Goods

Kimberly-Clark, the company behind Kleenex and Huggies, has announced a $40 billion acquisition of Kenvue, the maker of Tylenol, Band-Aid, Listerine, and Neutrogena.

Challenges Facing Kenvue

Kenvue has faced significant challenges, particularly with Tylenol, due to claims linking the pain reliever to autism. While U.S. health officials have raised concerns, no new evidence supports these claims. Despite this, President Trump advised pregnant women to avoid Tylenol.

The controversy has impacted Kenvue's stock, which dropped this year. However, the stock surged 20% when the acquisition deal was announced.

Kimberly-Clark's Stock Reaction

Kimberly-Clark's stock fell over 10% following the announcement. If this drop persists, the company could reach its lowest valuation in years.

Kenvue was once part of Johnson & Johnson but was spun off in 2023. Since then, it has struggled as an independent company.

Activist Investor Influence

Activist investors have pushed for changes at Kenvue. In March 2024, Jeffrey Smith from Starboard Value joined Kenvue's board. In July 2024, the company's CEO stepped down, and a strategic review was initiated.

Details of the Acquisition

Kimberly-Clark shareholders will own 54% of the new company.
Combined, the companies will generate $32 billion in annual revenue and $7 billion in operating profit.
They expect to save nearly $2 billion in costs over the next three years.

Legal and Financial Challenges

Kenvue faces hundreds of lawsuits related to Tylenol and baby powder products (which caused legal trouble for Johnson & Johnson). The company has been trying to settle claims that its talc-based baby powder caused cancer.

Scientific Research on Tylenol

Scientists have studied the link between Tylenol and neurodevelopmental disorders for years, but results remain inconclusive. Kenvue does not disclose Tylenol's revenue, but it is estimated at $1 billion annually.

Future Outlook

The deal is expected to close in the second half of 2026, pending shareholder and regulatory approvals.

Mike Hsu, Kimberly-Clark's CEO, will lead the new company.
The headquarters will be in Irving, Texas, but Kenvue's locations will remain significant.