Kimberly-Clark Corp.’s potential divestiture of its international tissue business has garnered interest from several prominent companies, including Royal Golden Eagle Pte, Suzano SA, and Asia Pulp & Paper Co., according to sources familiar with the matter.
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The business unit could be valued at approximately $4 billion, although deliberations are ongoing and may not result in a transaction. Representatives for Kimberly-Clark and Royal Golden Eagle declined to comment, while Suzano and Asia Pulp & Paper did not immediately respond to requests for comment.
Kimberly-Clark Explores Strategic Options for International Tissue Operations
This potential sale follows a Bloomberg News report in October that Kimberly-Clark was working with advisors to evaluate its tissue operations outside North America. The review suggested a possible sale of part or all of the international business.
In March, Kimberly-Clark announced a reorganization, consolidating its overseas consumer and professional tissue businesses into a new division called International Family Care & Professional. This division generates roughly $3.5 billion in annual sales with operating margins of around 10%.
Graph illustrating Kimberly-Clark's stock performance.
Kimberly-Clark Faces Challenges Amidst Lowered Sales Forecast
The potential sale comes as Kimberly-Clark faces challenges. In October, the company lowered its full-year organic sales forecast from mid-single-digit growth to 3% to 4% after reporting weaker-than-expected results. Organic sales exclude the impact of currency fluctuations and other factors. The company is scheduled to announce its 2024 results on January 28th. Since the October announcement, Kimberly-Clark’s shares have declined 12%, resulting in a current market value of approximately $42 billion.
Potential Sale Signals Strategic Shift for Kimberly-Clark
The potential sale of the international tissue business could represent a significant strategic shift for Kimberly-Clark, allowing the company to focus on its core North American market and potentially invest in other growth areas. The interest from major players like Royal Golden Eagle, Suzano, and Asia Pulp & Paper underscores the value of the business and its potential for future growth under new ownership. The outcome of these deliberations will be closely watched by investors and industry analysts alike.
