Natalie Sherman<\/span>Business reporter<\/span><\/p>\n<\/div>\n <\/span><\/div>\n<\/div>\n Kimberly-Clark is set to buy Kenvue, the maker of Tylenol, which has faced attacks from the White House and flagging demand for its products. <\/p>\n The more-than $40bn (\u00a330.5bn) cash-and-stock deal would create a consumer giant, with a portfolio of some of the world’s most commonly stocked bathroom and medicine cabinet items.<\/p>\n Kimberly-Clark makes Kleenex, Huggies nappies and some of the biggest toilet paper brands in the US. As well as Tylenol, Kenvue is known for Band-Aid, Zyrtec, Benadryl, Neutrogena and Aveeno. <\/p>\n Both firms have been under pressure as price-conscious households increasingly turn to cheaper, store-brand versions of their products.<\/p>\n<\/div>\n Johnson & Johnson spun off Kenvue as a standalone company in 2023, separating its faster growing, more profitable medical technical and pharmaceutical business from its consumer products. <\/p>\n Executives argued at the time that a narrower focus would help each company flourish.<\/p>\n But Kenvue’s business and its shares have struggled, down almost 30% in a year, making it a target of activist investors, who have bought up stakes and pushed the firm for changes, including a possible sale. <\/p>\n The firm’s shares sank last month, when the Trump administration publicly linked use of Tylenol during pregnancy to autism, despite what scientists say is inconclusive evidence.<\/p>\n Sales in the first nine months of the year are down almost 4% compared with 2024.<\/p>\n<\/div>\n In their announcement of the deal, executives said the companies had “complementary strengths” and a combination would accelerate growth. They said they expected to complete the transaction in the second half of next year. <\/p>\n Together, the firms are on track to generate $32bn in sales in this year, they said. <\/p>\n “With a broader product range and greater reach, the combined company will be a global health and wellness leader,” they said. <\/p>\n<\/div>\n The cash-and-stock deal values Kenvue at about $48.7bn, the companies said. <\/p>\n They said Kenvue shareholders would receive about $21 per share, including $3.50 in cash and a portion of shares in Kimberly Clark. <\/p>\n Kenvue shares jumped 17% in early trading to more than $16.<\/p>\n But shares in Kimberly-Clark sank more than 10% in a sign of investor doubts about the deal, which exposes the firm to new risks.<\/p>\n<\/div>\n Kenvue is facing a lawsuit from the Texas attorney general, claiming that Kenvue and Johnson & Johnson hid alleged dangers that the drug posed to children’s brain development.<\/p>\n Kenvue brands, while under the Johnson & Johnson umbrella, had also faced crisis in recent years over lawsuits linking use of its baby powder to cancer. <\/p>\n A recent lawsuit in the UK picked up on those claims, accusing Johnson & Johnson of knowingly selling baby powder contaminated with asbestos for decades. <\/p>\n The company, which now makes its talcum powder with cornstarch, has denied the allegations.<\/p>\n<\/div>\n<\/div>\n![\"AFP](\"https:\/\/ichef.bbci.co.uk\/news\/480\/cpsprodpb\/67d8\/live\/b553ca30-b8c9-11f0-bd50-3b23a20f2bf3.jpg.webp\")
AFP via Getty Images<\/span><\/div>\n<\/div>\n