New York
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Huggies maker Kimberly-Clark announced Monday that it will acquire Kenvue, the parent company of Tylenol, for about $50 billion, creating a massive consumer goods conglomerate.
The merger is the latest in a recent explosion of deals and signals the Trump administration’s openness to corporate acquisitions. But it also means taking a gamble that one of Kenvue’s signature products can withstand heightened scrutiny.
The acquisition comes weeks after Kenvue’s stock price fell sharply after President Donald Trump made baseless claims linking autism to Tylenol use during pregnancy. The company strongly pushed back against his administration’s accusations.
The two companies said that this integrated business will unite brands worth $10 billion and generate annual sales of $32 billion. The new company will make products that “affect nearly half of the world’s population at every stage of life,” including Johnson’s baby products, Clean & Clear skin care, Kleenex, Listerine mouthwash and Defense adult diapers, the company said in a statement.
Kenvue was spun off from Johnson & Johnson in 2022, with J&J retaining the recognizable name of its larger pharmaceutical division and offloading its consumer brands. It was widely expected to be a takeover target.
This transaction is expected to be completed in the second half of next year. Upon completion of the merger, Kimberly-Clark shareholders will own approximately 54% of the newly combined company, while Kenvue shareholders will own the remainder.
This transaction involves significant risk.
On Monday, Kenvue reported a 4.4% decline in overall sales, with its self-care segment, which includes Tylenol, also down 5.3% in the quarter ended Sept. 28.
The company explained that the decline in sales was the result of “reduced trading inventory for certain customers.” This is likely a trade-off from cash-strapped customers to cheaper private brands that offer similar quality. Perhaps it’s a warning to new companies betting on the lineup of name-brand companies.
And Kenvue faces potentially intense legal scrutiny over the Trump administration’s claims. Last week, Texas Attorney General Ken Paxton filed a lawsuit alleging that Kenvue “deceptively” marketed Tylenol to pregnant women and linked the drug to an increased risk of autism. Kenvue said it would “vigorously defend” the claims.
Kimberly-Clark CEO Mike Hsu said on a call with analysts Monday that the board “carefully considered all risks and all opportunities,” held several meetings with “healthcare, regulatory and legal experts” and decided the deal was “a generational value creation opportunity for both companies.”
Kenvue CEO Kirk Perry added, “We stand firmly behind the science and safety of our products.” “These things have been studied for decades, and we continue to defend that science, as does the medical community.”
The cash and stock deal will result in Kimberly-Clark (KMB) paying $21.01 per Kenvue (KVUE) share, a significant premium over Friday’s closing price of $14.37.
But this premium is only slightly higher than the $17 per share Kenvue stock was trading at just before President Trump held his “Don’t Take Tylenol” press conference on September 22nd. And the stock was trading just above $20 just before the first news reports that the Trump administration may uncover a link between Tylenol and autism.
Shares of Kenvue surged more than 16% on Monday. Kimberly-Clark’s stock fell nearly 13%.
M&A explosion
This transaction took place as the Trump administration’s deregulated environment triggered mergers and acquisitions (M&A).
The Kenvue acquisition is the third-largest acquisition this year, according to mergers and acquisitions data provider Dealogic. The $72 billion deal between railroad companies Union Pacific and Norfolk Southern topped the list, while Saudi Arabia’s Public Investment Fund’s $55 million purchase of video game maker Electronics Arts came in second.
After a significant cooling in deals in the post-pandemic era, M&A appears to have come back in a big way this year. So far in 2025, $1.9 trillion in transactions have been completed in the U.S., the highest figure since 2021, according to Dealogic. Excluding the pandemic-driven M&A boom, 2025 deals have the highest total value since 2015 and are on pace to surpass that.
Kimberly-Clark’s acquisition of Kenvue would be the fourth-largest consumer goods deal of all time, following Altria’s $111 billion spinoff of Philip Morris International in 2008, British American Tobacco’s $64 billion acquisition of Reynolds American in 2015, and P&G’s $61 billion acquisition of Gillette in 2005.
