Suzano stock soars on joint venture news; Kimberly-Clark dips

Investing.com -- Shares of Suzano Papel e Celulose SA ADR (NYSE:SUZ) surged 7.7% following the announcement of a joint venture with Kimberly-Clark (NYSE:KMB) Corporation (NASDAQ:KMB), which saw its shares decline by 1.7%. The new partnership, set to focus on the manufacture and distribution of tissue products, positions Suzano to acquire a majority stake in the venture, while Kimberly-Clark’s stake sale appears to have prompted a slight sell-off in its shares.

The transaction, valued at US$3.4 billion, will see Suzano take a 51% interest in the joint entity, with Kimberly-Clark retaining 49%. Suzano’s cash payment of US$1.734 billion for its stake is contingent upon regulatory approvals and the completion of a corporate reorganization by Kimberly-Clark. The deal, expected to close in mid-2026, involves around 9,000 employees and includes 22 manufacturing facilities across various regions.

The joint venture is anticipated to generate significant operational efficiencies by leveraging Suzano’s industrial expertise with Kimberly-Clark’s brand management and commercialization experience. The new business will incorporate more than 40 regional Kimberly-Clark brands and will have access to its global brands through a long-term license.

This strategic move aligns with Suzano’s disciplined approach to capital allocation and growth, as emphasized by the company’s CFO, Marcos Assumpção. The partnership is seen as a continuation of Suzano’s expansion, following its 2023 acquisition of Kimberly-Clark’s Brazilian tissue assets and the ongoing construction of a new tissue paper mill in Brazil.

Suzano’s CEO, Beto Abreu, highlighted the complementary capabilities of the two companies and the shared focus on innovation and sustainability. The joint venture agreement includes provisions for management and operation, as well as a call option for Suzano to potentially acquire the remaining stake held by Kimberly-Clark in the future.

This development underscores Suzano’s commitment to scalable businesses and operational efficiency, which has been a key factor in its growth strategy. The market’s response to the joint venture announcement reflects investor confidence in Suzano’s direction and potential for value creation through this international partnership.

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