Suzano and Kimberly-Clark form $3.4 billion tissue venture

SÃO PAULO - Suzano, the world’s largest pulp producer, and consumer staples giant Kimberly-Clark (market cap: $45.9 billion) have announced a joint venture to combine their international tissue businesses in a deal valued at $3.4 billion. Suzano will hold a 51% stake in the new entity, with Kimberly-Clark retaining 49%. According to InvestingPro, Kimberly-Clark maintains a "GOOD" overall financial health score, suggesting solid fundamentals for this strategic move.

The transaction, expected to close by mid-2026, involves Suzano acquiring the majority share for $1.734 billion in cash, contingent upon regulatory approvals and the completion of a corporate reorganization by Kimberly-Clark. The partnership will encompass 22 manufacturing facilities across 14 countries and approximately 9,000 employees. These assets generated net sales of $3.3 billion in 2024. Kimberly-Clark’s impressive track record includes 52 consecutive years of dividend increases, with a current yield of 3.64%. Get deeper insights into KMB’s financial strength and growth potential with a comprehensive Pro Research Report, available exclusively on InvestingPro.

Kimberly-Clark will maintain its consumer tissue and professional businesses in the United States and interests in joint ventures in other regions, including Mexico, South Korea, and Bahrain. The new venture will manage a portfolio over 40 regional brands and hold a long-term license for global brands such as Kleenex and Scott.

Beto Abreu, CEO of Suzano, emphasized the synergy between the companies, citing their leadership in markets and shared focus on innovation and sustainability. Mike Hsu, Kimberly-Clark’s CEO, also expressed enthusiasm for the partnership’s potential to enhance their international family care and professional business.

The transaction aligns with Suzano’s strategy for growth with financial discipline and builds on its presence in the tissue market, following the acquisition of Kimberly-Clark’s Brazilian tissue assets in 2023. Suzano is constructing a new tissue paper mill in Brazil, set to increase its annual capacity by 60,000 tonnes.

At the closing of the deal, a joint venture agreement will establish the management and operational framework of the new company, which will have a five-member Board of Directors, with Suzano appointing three members and Kimberly-Clark two. With a robust gross profit margin of 36.45% and strong return on assets of 14.93%, Kimberly-Clark brings significant operational expertise to this partnership. Discover more detailed analysis and 8 additional ProTips about KMB’s performance on InvestingPro.

This strategic move aims to leverage Suzano’s industrial efficiency and Kimberly-Clark’s brand management expertise to create a strong global presence in the tissue market. The information is based on a press release statement.

In other recent news, Kimberly-Clark is nearing the sale of its Kleenex and tissue businesses outside North America for approximately $3.5 billion. The potential buyer is Suzano, a Brazilian pulp producer, and the deal aligns with Kimberly-Clark’s strategy to focus on more profitable areas. Additionally, the company has announced a major $2 billion investment in its North American operations over the next five years, which includes constructing a new manufacturing facility in Ohio and expanding a site in South Carolina. This expansion is expected to create over 900 jobs and is the largest domestic investment by the company in over three decades.

In leadership changes, Russ Torres has been promoted to President and COO of Kimberly-Clark, effective immediately. Torres, who has been with the company since 2020, will oversee daily operations and reports directly to CEO Mike Hsu. Meanwhile, Kimberly-Clark’s shareholders have approved the election of all board nominees and the appointment of Deloitte & Touche LLP as independent auditors for 2025. The company continues its long-standing tradition of dividend payments, announcing a quarterly dividend of $1.26 per share, marking the 91st consecutive year of such payouts.

These developments reflect Kimberly-Clark’s ongoing efforts to strengthen its market position and enhance shareholder value.

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