Suzano and Kimberly-Clark announce US$3.4B joint venture
Suzano and Kimberly-Clark have announced an agreement to jointly form a US$3.4 billion global company to manufacture, market, and distribute consumer and professional tissue products across more than 70 countries.
Under the terms of the agreement, the Brazilian pulp producer Suzano will acquire a 51% interest in the entity, with US consumer goods and personal care giant Kimberly-Clark retaining a 49% interest. Suzano will reportedly pay Kimberly-Clark US$1.734 billion in cash at the close of the transaction, subject to customary post-closing purchase price adjustments.
Beto Abreu, CEO at Suzano, says: “This new company brings together two global players that are leaders in their respective markets, with complementary capabilities that combine Suzano’s industrial expertise and operational management efficiency with Kimberly-Clark’s know-how in brand management, marketing, and commercialization of both regional and global brands, as well as its extensive experience in managing operations across multiple regions worldwide.”
“Both companies share strong organizational cultures rooted in innovation and sustainability. We look forward to combining great talent, good assets, and tremendous brands that are trusted by consumers.”
Global scale
The assets to be included in the new joint venture generated net sales in 2024 of approximately US$3.3 billion.
The new business, to be incorporated in the Netherlands, will include 22 manufacturing facilities across 14 countries in Europe, Asia, Africa, Oceania, and the Americas. The facilities are said to have a combined annual production capacity of more than one million tons of tissue products, including toilet paper, napkins, paper towels, and facial tissues.
Regional brands from Kimberly-Clark will become part of the joint venture, which will also gain long-term licensing rights to use Kleenex.The venture will integrate more than 40 regional brands from Kimberly-Clark’s International Family Care and Professional portfolio. It will also operate under a long-term license for the use of brands such as Kleenex, Scott, Cottonelle, WypAll, Viva, and Kimberly-Clark Professional.
Kimberly-Clark says it will retain its consumer tissue and professional business in the US and maintain its interests in joint ventures in Mexico, South Korea, Bahrain, and other select markets.
Mike Hsu, Chairman and CEO at Kimberly-Clark, says: “This transaction represents a powerful step forward in Kimberly-Clark’s transformation journey. We are pleased to enter into a strategic partnership with Suzano, a leader in its field, and we look forward to working closely together to deliver on the significant opportunities ahead for our International Family Care and Professional Business.”
Leadership and workforce integration
Suzano and Kimberly-Clark will jointly oversee the venture through a five-member board of directors, with Suzano appointing three members and Kimberly-Clark two. Approximately 9,000 employees will be involved in the transaction.
The agreement also includes a call option that allows Suzano to acquire the remaining 49% interest in the future.
Marcos Assumpção, CFO of Suzano, comments: “This transaction reflects Suzano’s disciplined approach to capital allocation with value creation and is fully in line with our financial policy. Moreover, the partnership with Kimberly-Clark ensures business operational continuity and an alignment toward operational efficiency opportunities, mitigating risks typically encountered during international expansion.”
Luis Bueno, executive vice president of Consumer Goods and Corporate Affairs at Suzano, comments: “We have an excellent understanding of Kimberly-Clark’s culture and internal processes, thanks to our 2023 acquisition of the Brazilian tissue business. We have already been able to achieve significant efficiency gains in these operations, which we are confident can be replicated in other regions.”
“Our ability to achieve this goal is intrinsically tied to the tremendous quality of the talent within Kimberly-Clark’s team, who have helped develop and grow brands that are a part of the everyday lives of hundreds of millions of people around the world.”
