"Kimberly-Clark is laying down $40bn to buy Kenvue in a massive deal that has puzzled some investors, as the maker of Tylenol struggles with weak sales, lawsuits and White House attacks linking its painkiller to autism. Shares of Kimberly-Clark dropped sharply after the Monday announcement as stockholders scrutinised the 46 percent premium being paid for the former Johnson & Johnson unit that has had a turbulent year."
"Despite the concerns, Kimberly-Clark forecast $2.1bn in annual cost savings from the deal, with the addition of Kenvue's vast portfolio of brands from Listerine mouthwash to skincare names like Aveeno and Neutrogena expected to bring in annual revenues of roughly $32bn for the combined company. Both companies sit side by side on store shelves, so the scale and distribution logic make sense even if the Tylenol overhang remains a shadow any buyer would rather avoid, said Kimberly Forrest, chief investment officer at Bokeh Capital Partners."
Kimberly-Clark agreed to acquire Kenvue for $40bn, paying a 46 percent premium for the former Johnson & Johnson consumer-health unit. Kenvue has faced weak sales, hundreds of private lawsuits alleging links between Tylenol use in pregnancy and autism or attention deficit, and public criticism from President Donald Trump. Kenvue ousted its CEO in July, and its shares had fallen before jumping 17.5 percent on the takeover announcement. Kimberly-Clark projects $2.1bn in annual cost savings and anticipates combined annual revenues of roughly $32bn by adding brands such as Listerine, Aveeno and Neutrogena. Analysts warn litigation risk is hard to quantify.
Read at www.aljazeera.com
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