Headaches be damned—Kimberly-Clark has struck a $48.7 billion deal to purchase Kenvue—the maker of Tylenol and a company spun off from Johnson & Johnson in 2023—in a takeover that would create the second-biggest proprietor of health and wellness products in the world.
Kimberly-Clark is not only a great fake name to use while you’re on vacation: it’s the company responsible for making Huggies and Depend diapers, Kleenex tissues, and Cottonelle toilet paper. By joining forces with Kenvue and its well-known products, like the Johnson’s Baby line and Band-Aid, Kimberly-Clark expects to drive $32 billion in revenue annually.
Legal and political issues abound
While the Trump administration is amenable to mergers and acquisitions, the president in September promoted unfounded claims linking Tylenol use during pregnancy to autism, something Kenvue and many physician groups said research does not support. Tylenol sales, which Morningstar estimates are worth ~$1 billion a year, have since declined sharply.
Plus, Kenvue’s legal troubles are poised to become Kimberly-Clark’s problem if the deal closes as expected in the second half of 2026:
- Texas Attorney General Ken Paxton alleged in a lawsuit filed last week that the company hid evidence that linked Tylenol to neurodevelopmental disorders. It also claims that Kenvue was created to shield J&J from legal liability over the link, but the New York Times reports that the timeline doesn’t match the influx of lawsuits beginning in 2022 and the initial plan to make Kenvue its own entity in 2021.
- Many lawsuits also claim that the talc formerly used in Johnson’s Baby Powder caused cancer. The terms of the spinoff have largely protected Kenvue in the US, but a similar lawsuit was recently filed in the UK.
Zoom out: Kenvue had been facing activist investor pressure to find a sale—its stock is down nearly 24% YTD even after jumping ~12% yesterday on the news that Kimberly-Clark was paying a 46% premium on its Friday closing price. Kimberly-Clark’s share price, on the other hand, dropped ~14% yesterday.—DL