M&A News: Kimberly-Clark Eyes $3.5B Global Tissue Sale amid Portfolio Overhaul

Kleenex owner Kimberly-Clark (KMB) is reportedly close to finalizing a $3.5 billion deal to sell its Kleenex and tissue businesses outside North America to Brazilian pulp producer Suzano (SUZ). According to the Wall Street Journal, the divestment is part of a broader strategy to streamline operations and concentrate on higher-margin segments like Scott toilet paper and Huggies diapers. The report also indicated that the deal may be finalized as early as this week.

Deal Marks Kimberly-Clark’s Exit From Global Tissue Market

Kimberly-Clark’s international tissue division supplies both individual consumers and commercial clients with products like Andrex toilet paper and WypAll cleaning wipes.

Selling this segment aligns with the company’s 2024 strategy to restructure into three distinct units to sharpen its competitive edge, improve profitability, and revive its underperforming stock. Notably, the company’s international tissue division, called the International Family Care & Professional segment, is the smallest among its three main business units, generating less than $3.5 billion in annual net sales. It also has the lowest profit margins, highlighting the company’s motivation to divest the segment.

The sale also comes as Kimberly-Clark grapples with rising costs linked to U.S. trade tariffs, which continue to weigh on its business outlook. In April, the company lowered its annual profit forecast, citing increased expenses caused by the tariffs.

If the deal is finalized, Kimberly-Clark will retain its largest segment, the North American business, which generated $11 billion in sales in 2024. It will also retain its international personal care division, which brought in about $5.7 billion. The sale would streamline operations and position the company as a more focused, higher-margin enterprise.

Is Kimberly-Clark a Good Stock to Buy?

Kimberly-Clark shares have gained roughly 5% year-to-date, modestly outpacing the S&P 500, following a period of underperformance in recent years. The potential sale is likely to be well-received by the market as a clear growth narrative and profitability focus may re-attract institutional investors and analysts.

Overall, Wall Street has a Moderate Buy rating on KMB stock, based on five Buys, five Holds, and one Sell assigned in the last three months. The average Kimberly-Clark share price target is $146.27, which implies a 5.6% upside from the current levels.

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