KMB changes
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- About
- Kimberly-Clark makes personal care and tissue products, which people use every day. Its brands include Huggies, Kleenex, Scott, Kotex, Cottonelle, Poise, Depend and Pull-Ups, and the company says that its brands hold the number one or number two share position in about 70 countries. It sells in more than 175 countries and territories. On July 1, 2026, it put most of its former International Family Care and Professional business into Arbex, a joint venture in which Suzano owns 51% and Kimberly-Clark owns 49%. Kimberly-Clark now reports that business as discontinued operations. In November 2025, it agreed to buy Kenvue, the maker of Tylenol, Listerine and Neutrogena, for shares and removed: cash. When added: cash, and it completed the purchase removed: closes, the company will become added: on November 2, 2026. The purchase made Kimberly-Clark a much larger health and wellness company. added: It now reports four segments: North America, Asia Pacific Focus Markets, Europe, Middle East and Africa, and Enterprise Markets.
- Thesis
- The market prices Kimberly-Clark for two concerns. The first is slow growth in its current business. In its preliminary Q3 2026 data, organic sales fell 1.3%, and false social media claims about the quality of its diapers in China lowered sales. The second is the Kenvue removed: purchase. added: purchase, which closed on November 2, 2026. Kimberly-Clark removed: will issue added: issued about removed: 280 added: 281 million new shares and removed: pay added: paid about $6.7 billion in cash, which it removed: will fund added: funded partly with new debt. Investors fear that the company removed: pays added: paid too much, removed: takes added: took on too much debt, and must combine two large companies while its own sales are weak. For the gap to close, removed: three added: two things must be true. removed: The Kenvue purchase must close by the end of 2026, as management expects, after the last foreign regulatory approvals. Organic sales must return to growth as the effect of the China disruption fades. The combined company must show removed: in its first plans that it can removed: cut costs added: get its planned run-rate synergies of about $2.1 billion and pay down the new debt. The final Q3 2026 report on November 5, 2026 is the first test, and the removed: close of the purchase and the 2027 outlook added: of the combined company in early 2027 removed: are added: is the next removed: tests. added: test. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a weak start for the combined company, which would leave Kimberly-Clark with more debt and slow growth.
- Risks
- The Kenvue purchase is large. Kimberly-Clark removed: will issue added: issued about removed: 280 added: 281 million new shares and removed: pay added: paid about $6.7 billion in removed: cash. added: cash, and it expects about $3.1 billion of pre-tax integration charges through 2029. If the combined company does not get the cost savings it expects, or if the integration is slow, earnings per share can fall and the new debt can stay high for a long time. removed: The purchase still needs some foreign regulatory approvals. If the close is late, or if regulators ask for changes, costs can increase. Under certain conditions, either company may have to pay the other a termination fee of $1.1 billion. Organic sales fell about 1.3% in Q3 2026, based on preliminary data. False claims about diaper quality in China lowered sales, and the company expects that this disruption lowers its 2026 organic growth by about 1 percentage point. The President and Chief Operating Officer leaves on November 2, 2026, removed: close to the removed: planned time of added: day the Kenvue removed: close. added: purchase closed. A change in senior management during a large integration can slow decisions.
- Balance sheet
- Cash: $956M Debt: $6.5B Net debt: $5.6B Interest cover: 13× Debt due within 12 months: $43M At June 30, 2026, debt of continuing operations was $6.52 billion: long-term debt of $6.47 billion and debt payable within one year of $43 million. Cash was $956 million, and the preliminary data shows cash of about $1.87 billion at September 30, 2026. Interest cover is operating profit divided by interest expense for the first half of 2026. Kimberly-Clark has a $4.0 billion revolving credit facility that matures in December 2030 and a $1.0 billion facility that matures in June 2028. For the Kenvue purchase, it removed: has added: had a bridge loan commitment of $7.7 billion, a delayed draw term loan facility, and $4.3 billion of forward-starting interest rate swaps for new fixed-rate debt. added: It ended the last $3.9 billion of the bridge loan commitment after it sold $4.9 billion of senior notes in October 2026. The debt removed: will increase added: increased much when the purchase removed: closes, added: closed on November 2, 2026, because Kimberly-Clark also removed: takes added: took on Kenvue's removed: notes through the exchange offer. added: notes. As of Jun 30, 2026.
- Checkpoints
- Nov added: 2, 2026: Kenvue purchase closes. Passed. Watch: A close by the end of 2026 on the agreed terms passes; a delay into 2027 or new conditions from regulators fail. Outcome: Kimberly-Clark completed the purchase on November 2, 2026, on the agreed terms of 0.14625 Kimberly-Clark shares and $3.50 in cash for each Kenvue share. Nov 5, 2026: Q3 2026 earnings: organic sales. Pending. Watch: Final results that match the preliminary data and an unchanged 2026 outlook pass; a cut to the outlook or a larger fall in organic sales fails. removed: Dec 2026 added: Jan 2027 (estimate): removed: Kenvue purchase closes. added: 2027 outlook of the combined company. Pending. Watch: A removed: close by added: 2027 outlook that keeps the removed: end added: synergy target of removed: 2026 on the agreed terms added: about $2.1 billion and shows a plan to reduce debt passes; a removed: delay into 2027 added: lower synergy target or removed: new conditions from regulators fail. added: slow integration fails.
- Recent events
- added: Nov 2, 2026: Kimberly-Clark completed its purchase of Kenvue. Each Kenvue share became 0.14625 Kimberly-Clark shares and $3.50 in cash, and Kimberly-Clark issues about 281 million new shares for them. The company repeated its target of about $2.1 billion of yearly run-rate synergies: about $1.9 billion of cost savings within three years, and about $500 million of profit from added sales less about $300 million of reinvestment within four years. Three Kenvue directors joined the board, and three Kimberly-Clark directors left it, so the board now has 13 directors. Nov 2, 2026: Kimberly-Clark started the Kenvue Integration Program, which its board approved on October 30, 2026. The company expects pre-tax charges of about $3.1 billion through 2029, of which about $2.5 billion is cash, mostly for supply chain changes, technology integration, job cuts and advisers. It also expects to spend about $1.4 billion of capital on the program. Oct 29, 2026: Kimberly-Clark sold $4.9 billion of senior notes, due from 2028 to 2036, with interest rates from 5.100% to 5.800%. With the money, it ended the last $3.9 billion of its bridge loan for the cash part of the Kenvue purchase. It also extended its exchange offer for Kenvue notes to November 2, 2026. Oct 15, 2026: Kimberly-Clark gave preliminary Q3 2026 data. Net sales were about $4.13 billion, and organic sales fell about 1.3%. Adjusted EPS from continuing operations was about $1.70, up from $1.45 a year earlier. The company said that its 2026 outlook stays the same, and it will report final Q3 results on November 5, 2026. Oct 13, 2026: Kimberly-Clark received the necessary consents from holders of Kenvue notes in its offer to exchange up to $7.0 billion of Kenvue notes for new Kimberly-Clark notes. The company does not expect the exchange to settle before November 2, 2026, and it expects settlement at about the close of the Kenvue purchase. Oct 1, 2026: Kimberly-Clark said that Russell Torres, its President and Chief Operating Officer, will leave the company on November 2, 2026. Aug 4, 2026: Kimberly-Clark reported Q2 2026 results. Net sales from continuing operations were $4.19 billion, up 0.6%, and adjusted EPS from continuing operations was $1.80, up 10.4%. False claims on social media about the quality of its diapers in China lowered sales in the quarter. Management said that the Kenvue purchase was on track to close by the end of 2026. Jul 1, 2026: Kimberly-Clark completed the Arbex joint venture with Suzano. Suzano bought 51% of the former International Family Care and Professional business for about $1.7 billion, and Kimberly-Clark kept 49%.