Tylenol maker Kenvue agrees $48.7bn Kimberly-Clark takeover

Kenvue has agreed to a takeover by consumer goods giant Kimberly-Clark, two years after its spinout from Johnson & Johnson and as it faces a lawsuit over discredited claims that its Tylenol painkiller causes autism.

Kimberly-Clark – which makes products like Kleenex tissues and Andrex toilet paper and had revenues of around $20 billion last year – is offering $3.50 per share in cash as well as around 0.14 of its own shares for Kenvue, giving the consumer healthcare business an enterprise value of around $48.7 billion.

Kenvue has been having a turbulent time of it since separating from J&J, with a steep decline in its share price this year, due to sales weakness in some product categories like skin health and beauty, which has already claimed the job of its chief executive, Thibaut Mongon, and forced the company to consider "strategic alternatives."

Further pressure has come in recent weeks from a lawsuit filed in the UK that could add to liabilities faced by Kenvue over claims that its talc products were linked to cancer, plus the launch of an investigation into Tylenol (acetaminophen) as a possible cause of autism by the FDA.

On the latter front, the risk seems to have receded a little after HHS Secretary Robert F Kennedy Jr said that there would be no moves to limit the use of Tylenol, as a causative association with autism was not proven, although, he still advised the data were "suggestive" of a link and it should be used with caution in pregnancy and for children.

That marks a reduction in the rhetoric coming out of the HHS earlier, after President Trump warned in September against Tylenol use without giving any scientific evidence for that position. Still, Kenvue is now facing a lawsuit in Texas claiming a link, prompting pushback from medical organisations who say the association files against the weight of scientific evidence.

Kenvue has staunchly defended Tylenol's safety in the wake of Trump's bombshell announcement and has said it will "vigorously defend" against the lawsuit.

Kimberly-Clark said that adding Kenvue to its stable will create a combined company with revenues of around $32 billion a year and the potential to carve around $1.9 billion off annual costs, adding that it will create "compelling value" for shareholders.

Investors seem sceptical. Kimberly-Clark's stock was trading down more than 13% at the time of writing, while Kenvue had climbed nearly 19%.