Oliver Barnes in New York and Ivan Levingston in London
Publishedyesterday
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Kimberly-Clark, the maker of Huggies and Andrex, has agreed to buy Tylenol owner Kenvue for $48.7bn, adding to a resurgence in US dealmaking and cementing this year as a record one for large takeovers.
Texas-based Kimberly-Clark on Monday announced a cash-and-stock deal for Kenvue, which has struggled as a public company since being spun out of Johnson & Johnson in 2023. The transaction, one of the largest in the consumer sector for several years, capped a frantic day of mergers and acquisitions across corporate America.
Energy companies SM Energy and Civitas struck a $13bn merger, power group Eaton acquired liquid cooling company Boyd Thermal for $9.5bn and gold miner Coeur Mining swooped on rival New Gold for $7bn.
The quartet of agreements adds to a wave of large tie-ups in recent weeks as US companies seize on the Trump administration’s openness to big deals, the prospect of further interest rate cuts from the Federal Reserve and an easing in global trade tensions.
Fifty-seven US transactions valued at more than $10bn have been announced so far this year, the highest in records stretching to 1970, according to data provider LSEG.
Not all the deals were well received by investors. Shares in Kimberly-Clark fell 13 per cent on Monday, denting the value of the stock portion of the transaction, while Kenvue jumped nearly 17 per cent.
Kenvue has had a troubled run as an independent company since being spun out of Johnson & Johnson, with its share price down about a third this year before Monday’s move. In September, US President Donald Trump urged pregnant women to avoid taking its over-the-counter painkiller Tylenol, citing unproven links to autism.
US health secretary Robert F Kennedy Jr has since admitted that there is “not sufficient” evidence to say the popular pain relief medication “definitely causes autism”. But Kenvue is fighting a lawsuit from the Texas attorney-general over alleged deceptive marketing over the safety of Tylenol. Potential litigation is a risk for Kimberly-Clark as it acquires Kenvue, said TD Cowen.
Mike Hsu, Kimberly-Clark chief executive, told analysts that the company consulted the “world’s foremost scientific medical, regulatory and legal experts” as the board reviewed the transaction, calling it a “generational value-creation opportunity”.
Kirk Perry, chief executive of Kenvue, said: “We stand firmly behind the science and the safety of our products.”
The intervention from the Trump administration came as the company was in the middle of a leadership reshuffle and strategic review aimed at assessing whether to sell the whole or parts of the group, following sustained pressure from activist hedge funds.
The sale to Kimberly-Clark marks one of the biggest consumer deals in recent years, eclipsing Mars’ $35.9bn takeover of Kellanova last year. Kenvue owns a vast stable of brands, including Listerine, Neutrogena and the Johnson’s Baby range.
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Kenvue shareholders will receive $3.50 a share in cash in addition to about 0.14 Kimberly-Clark shares for each Kenvue share. Following the transaction, Kimberly-Clark shareholders will own about 54 per cent of the combined company, while Kenvue’s investors will hold the remainder.
Earlier this year, Kenvue added Starboard Value’s co-founder Jeff Smith to the board. Other activist hedge funds — including Dan Loeb’s Third Point, Toms Capital Investment Management and Sachem Head Capital Management — also arrived on its shareholder register in recent months.
JPMorgan has committed financing for the transaction. Kimberly-Clark will also partially fund the deal with proceeds from spinning off its international tissue unit this year.
Additional reporting by Gregory Meyer in New York |
