On June 5, 2025, Kimberly-Clark announced a major strategic move by entering into a $3.4 billion agreement with Brazilian pulp and paper giant Suzano. The deal involves divesting a 51% stake in Kimberly-Clark’s international tissue business, which includes iconic brands like Kleenex and Scott. The transaction is designed to allow Kimberly-Clark to concentrate its resources on higher-margin personal care segments, marking a pivotal shift in the company’s long-term strategy.
Realignment Toward High-Growth Categories
The transaction reflects Kimberly-Clark’s effort to streamline operations and maximize shareholder value by focusing on product lines with stronger growth prospects and higher profitability. By shedding its international tissue assets, the company aims to redirect capital toward developing its core portfolio, which includes personal care items such as diapers, feminine hygiene products, and adult incontinence solutions.
Kimberly-Clark will retain its North American tissue operations, which remain a stronghold in its overall business model. In addition, the company maintains its ownership stakes in existing joint ventures located in Mexico, South Korea, and Bahrain. These regions continue to represent strategic importance due to their market potential and existing infrastructure.
Structure and Scope of the Joint Venture
The newly formed joint venture, International Family Care and Professional (IFP), will be 51% owned by Suzano and 49% retained by Kimberly-Clark. It will operate in over 70 countries and manage more than 40 regional and legacy brands. Notably, the agreement allows IFP to license globally recognized names such as Kleenex and Scott.
The IFP is projected to generate about $500 million in annual earnings before interest, taxes, depreciation, and amortization (EBITDA) from approximately $3.3 billion in annual net sales. The venture is poised to become one of the largest global players in the tissue market outside of North America, leveraging Suzano’s expertise in pulp production alongside Kimberly-Clark’s established brand equity and distribution networks.
Suzano’s Strategic Leap
For Suzano, this acquisition represents a significant milestone in its evolution from a raw materials supplier to a vertically integrated consumer goods company. The move provides Suzano with greater access to global markets and allows the company to capture additional value across the supply chain by moving closer to end consumers.
Suzano has been expanding aggressively in the consumer tissue segment. Its acquisition of Kimberly-Clark’s Brazilian tissue operations in 2023 laid the groundwork for this latest international expansion. The current deal builds upon that foundation, providing scale, brand recognition, and a global platform for growth.
Executives at Suzano emphasized that the transaction aligns with their long-term vision of becoming a diversified global leader in sustainable paper products. The partnership also allows Suzano to stabilize revenue streams that are typically cyclical in nature by tapping into more predictable consumer demand patterns.
Financial Implications and Market Dynamics
Kimberly-Clark expects to use the proceeds from the transaction to support a range of corporate initiatives, including stock repurchases and enhancements to its U.S. manufacturing operations. The company has committed $2 billion over the next five years to modernize and expand its domestic production facilities.
Investor response to the announcement was mixed. Shares of Kimberly-Clark saw a modest decline immediately following the news, suggesting some short-term uncertainty about the deal’s impact on earnings. Conversely, Suzano’s stock experienced a rise, reflecting investor confidence in the growth potential of the joint venture.
Despite the varied initial reactions, analysts largely agree that the deal provides long-term strategic benefits to both parties. Kimberly-Clark gains a leaner, more focused business model, while Suzano acquires a globally integrated platform for value-added consumer products.
Timeline and Regulatory Considerations
The transaction is expected to close by mid-2026, subject to customary regulatory approvals in the relevant jurisdictions. As part of the agreement, Suzano has been granted an option to acquire the remaining 49% of the joint venture under pre-negotiated terms, offering a pathway to full ownership in the future.
Both companies have pledged to ensure a seamless transition for employees, customers, and suppliers. Integration teams from both organizations are already collaborating on operational planning and brand alignment to ensure business continuity and growth.
Outlook and Broader Implications
This move signals a broader trend in the consumer goods sector, where large corporations are increasingly divesting lower-margin businesses to focus on areas with greater growth potential. The formation of IFP may serve as a model for similar strategic alliances between manufacturers and brand owners looking to optimize their global footprint.
For Kimberly-Clark, the transaction is a bold step toward sharpening its competitive edge in the global personal care market. For Suzano, it is an opportunity to evolve from a pulp powerhouse into a recognized consumer brand leader.