Key Takeaways
- Kimberly-Clark said Thursday that it agreed to create a new venture with Brazilian paper products firm Suzano.
- Suzano will own a 51% stake in the company’s international tissue and paper products business, while Kimberly-Clark owns the remaining 49%.
- The Kleenex and Huggies parent said earlier this year it was looking to focus on higher growth businesses with higher profit margins.
Kimberly-Clark (KMB) on Thursday announced a partnership with Brazilian pulp and paper producer Suzano (SUZ) to split ownership of Kimberly-Clark’s international tissue and paper products business.
The parent company of Cottonelle toilet paper and Huggies diapers said Thursday it will own a 49% stake in the business, which Kimberly-Clark named its “International Family Care and Professional” (IFP) segment in a restructuring effort earlier this year, with Suzano owning the majority 51% stake.
The international tissue business Kimberly-Clark is offering up generated about $3.3 billion in sales in 2024, the company said, valuing it currently at about $3.4 billion. The IFP segment has more than 40 regional brands that the new venture will own the rights to, while five global brands like Kleenex and Scott’s paper towels will be licensed to the venture, excluding Kimberly-Clark’s operations in Mexico and South Korea.
CEO Says Kimberly-Clark Is Focusing on ‘Higher Growth, Higher Margin Businesses’
“Following years of deliberate investments that have strengthened Kimberly-Clark and IFP, we are excited to expand our partnership with Suzano and focus Kimberly-Clark’s portfolio on our higher growth, higher margin businesses,” Kimberly-Clark CEO Mike Hsu said.
Suzano will later have the chance to potentially buy out Kimberly-Clark’s 49% stake “at certain specified times and subject to certain conditions,” the companies said. The deal announced Thursday is expected to close by the middle of next year.
Kimberly-Clark’s first quarter profits had topped estimates while sales fell short. When the company reported its results in April, it also lowered its full-year profit forecasts to account for the potential impact of tariffs.
Shares of Kimberly-Clark were down about 2% in early trading Thursday, while Suzano’s U.S.-listed shares jumped 5%.
