Kimberly-Clark (KMB) announced on Thursday a partnership with Brazilian pulp and paper producer Suzano (SUZ) to jointly manage Kimberly-Clark’s international tissue and paper products business. Under the terms of the agreement, Kimberly-Clark will hold a 49% stake, with Suzano taking the majority 51% share.
Details of the Deal
The partnership involves Kimberly-Clark’s “International Family Care and Professional” (IFP) segment, which was restructured earlier this year. The IFP segment, which generated around $3.3 billion in sales in 2024, will be jointly owned by the two companies, while Kimberly-Clark’s global brands such as Kleenex and Scott will remain licensed to the venture. Operations in Mexico and South Korea will not be part of the deal.
Strategic Focus
Kimberly-Clark’s CEO, Mike Hsu, emphasized that the move aligns with the company’s strategy to focus on higher-growth, higher-margin businesses. This partnership is part of Kimberly-Clark’s ongoing effort to streamline its operations and invest in more profitable areas. The company had previously forecasted a dip in profits due to tariff impacts, but this new partnership is expected to bolster its global operations.
Future Considerations
As part of the deal, Suzano will have the option to buy out Kimberly-Clark’s 49% stake under specified conditions in the future. The transaction is anticipated to close by mid-2026, marking a significant shift in the structure of Kimberly-Clark’s international tissue operations.
Market Reactions
Following the announcement, shares of Kimberly-Clark fell by approximately 2%, reflecting investor uncertainty. On the other hand, Suzano’s U.S.-listed shares saw a 5% increase, indicating positive market sentiment regarding the partnership.
