Kimberly-Clark announced that it has entered into an agreement with Brazilian pulp producer Suzano to form a strategic partnership, creating a preeminent international tissue and professional products company and sharpening Kimberly-Clark’s focus on its higher growth, higher margin businesses. Kimberly-Clark will own a 49% interest in the new venture, which will include substantially all the assets of its International Family Care and Professional (IFP) business, and Suzano will own 51%.

Kimberly-Clark will contribute substantially all the assets of its IFP business to the venture, which encompasses sales in more than 70 countries, 22 manufacturing facilities and approximately 9,000 employees. IFP’s more than 40 regional brands will be owned by the new entity and its five global brands, including Scott, Kleenex, Viva, WypAll and Kimberly-Clark Professional, will be licensed to the venture by Kimberly-Clark under a long-term agreement. Kimberly-Clark’s interests in Mexico and its joint venture in South Korea are outside the scope of this transaction.

The business Kimberly-Clark is contributing to the venture generated approximately $3.3 billion of net sales in 2024. The transaction contemplates an implied current enterprise value for the business of approximately $3.4 billion, subject to certain purchase price adjustments at closing.

The company noted its expectation to classify the IFP businesses included in the transaction as discontinued operations within its financial disclosures beginning with its second quarter earnings results. The company currently anticipates reporting its second quarter and six months results by early August.

The transaction is not subject to any financing contingency.

At certain specified times and subject to certain conditions, Suzano will have the option to purchase Kimberly-Clark’s remaining 49% ownership interest under an agreed valuation framework.

The transaction is subject to the satisfaction of customary consultation requirements and closing conditions, including obtaining required regulatory approvals. The transaction has been unanimously approved by Kimberly-Clark’s Board of Directors and is expected to close in mid-2026.

Since standing up IFP as a separate business in 2024, Kimberly-Clark has enhanced its margins and improved market share momentum. Joining forces with Suzano will enable the business to capture its full potential. The parties’ combined capabilities and infrastructure is expected to reduce total delivered product costs and supply both branded and private label offerings across markets to benefit consumers and customers.

The transaction focuses Kimberly-Clark on its higher growth and higher margin business segments – North America and International Personal Care – and shifts its business mix towards its iconic, global brands. Upon completion of the transaction, approximately two-thirds of the company’s net revenues will come from personal care categories, improving its long-term growth trajectory, profitability and returns on investment.

Through the venture, IFP is expected to create more value for shareholders than Kimberly-Clark could achieve running IFP on its own. Kimberly-Clark will receive meaningful upfront cash proceeds that it expects to return to shareholders through share repurchases following the close of the transaction.

The transaction will also reduce Kimberly-Clark’s exposure to volatile input costs, enhancing its ability to deliver more predictable and consistent margins and profit growth over time.

“This transaction is a powerful step forward in the transformation strategy we laid out last year,” says Kimberly-Clark chairman and chief executive officer Mike Hsu. “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. Together, this positions each business to move forward with clarity and seize the tremendous opportunities ahead. We are grateful to our global teams who have made this moment possible.”

Jeff Melucci, Kimberly-Clark’s chief strategy, business development and administrative officer, says, “Suzano is a leader in its field, whose deep industrial manufacturing and fiber expertise complement Kimberly-Clark’s leading brands and world-class commercial capabilities. We look forward to working closely with Suzano to ensure a smooth transition to this exciting venture for IFP, our customers and other stakeholders to deliver on the promise inherent in the business.”

“This transaction generates immediate returns and long-term shareholder value as we capture the upside from a stronger international tissue and professional franchise and accelerate growth and innovation at Kimberly-Clark,” says Nelson Urdaneta, Kimberly-Clark’s chief financial officer. “As the largest fiber manufacturer in the world, Suzano has been an instrumental strategic partner in our efforts to build a more efficient and effective global supply chain. We look forward to strengthening that partnership in the years to come.”