Kimberly-Clark sells Global Tissue Business to Suzano
6/5/25
Overview of the Deal
Acquirer: Suzano (NYSE: SUZ)
Founded: 1924 (Brazil)
CEO: Walter Schalka
Employees: 37,000
Market Cap: $11.89B
Target: Kimberly-Clark (NYSE: KMB)
Founded: 1872 (Neenah, WI)
CEO: Michael D. Hsu
Employees: 38,000
Market Cap: $45.15B
LTM Revenue: $20.1B
Total Transaction Value: $3.4B
June 5, 2025, Suzano and Kimberly-Clark announce the creation of a global tissue company operating in over 70 countries. Joint venture will be the owner of Kimberly-Clark’s international tissue assets, including manufacturing facilities, marketing, and selling such as Kleenex and Scott in over 70 countries. Suzano will acquire a 51% stake in the new entity. Suzano will pay Kimberly-Clark $1.732B in cash subject to further price adjustments. Suzano will also have the option to purchase the remaining ownership interest in the future.
Suzano is one of the world’s largest pulp producers based out of Brazil with a strong Latin American presence, and the world’s largest producer of eucalyptus pulp. Suzano aims to combine innovation with sustainability to plant and harvest eucalyptus and other pulp responsibly.
Kimberly-Clark is a multinational consumer goods company operating in over 40 countries, specializing in health and hygiene products including diapers, tissues, and paper towels. They also produce various feminine products for personal and industrial use. Their known brands include Huggies and Kleenex.
This strategic acquisition will be incorporated in the Netherlands and will include 22 manufacturing facilities located in 14 countries across continents excluding Australia and Antarctica. This new company combines two global players integrating industrial expertise and operational efficiency across global regions. Collectively, these facilities have capacity to produce approximately 1 million tons of tissue per year.
“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.” – Beto Abreu (Suzano CEO)
Integration Outlook
Short-Term:
The vertical move to combine these two companies will bolster their capabilities to sell their products worldwide. Suzano’s leading pulp harvest will complement Kimberly-Clark’s production and distribution of products. This will allow for a larger reach, allowing new customers to access used and trusted products.
There can be expected early synergies from increased manufacturing efficiency and cost reduction in distribution. Without worrying about supply, factories can manufacture immediately and distribute across established networks. Suzano is also in the process of building a new $115 million tissue paper mill at its site, which will add 60,000 tons of annual capacity to the company’s Consumer Goods Business Unit.
Despite initial reach, cultural and geographical differences between the firms may pose challenges, as Suzano has. Clear leadership and collaborative products will be necessary for establishing momentum and showing dominance in the field. While this may be a worry, the CFO of Suzano states:
“Both companies share strong organizational cultures rooted in innovation and sustainability. We look forward to combining great talent, good assets, and tremendous brands trusted by consumers.”
The public also reacted positively to the news as shares of Suzano surged by 7.7% following the announcement. This is good news, as it had been performing poorly, down roughly 14%.
Long-Term:
This acquisition shows signs of positive growth strategically and financially. The platform could become the go-to for any consumers seeking sustainable paper and eucalyptus products. Trends seem to indicate that consumers care about sustainable practices, which take many years to implement. Suzano and Kimberly-Clark already are achieving this on a minor scale, so prioritizing this could prove beneficial to the company.
In a climate where raw materials have faced high volatility, this vertical move makes sense for Suzano. The new entity is positioned to operate as a fully integrated supply chain from forest to shelf. This structure could result in stronger margins and more pricing power.
With the increased reach, the company will be able to establish itself in growing economies, making itself the face of tissue and paper cosmetic products, creating a long-term advantage in an industry with relatively low margins.
Risks and Uncertainties:
This promising move doesn’t come without questions. Currency volatility and geopolitical risk are also factors, given Suzano’s exposure to the global nature of commodity pricing. A strengthening U.S. dollar or disruptions in emerging markets could negatively affect the cost advantages Suzano brings to the table. Additionally, commodity price swings in pulp and freight could undermine the cost savings that justify the integration. There is also the risk of antitrust scrutiny, depending on the regional market shares the combined company holds in the tissue segment. Finally, consumer trends continue to shift toward sustainability and digital alternatives, creating longer-term demand uncertainty in the traditional paper product market.
Successful integration will require disciplined execution, proactive risk management, and a clear vision for innovation to avoid value erosion in an increasingly competitive landscape.