Kimberly-Clark enters joint venture with Suzano to restructure global tissue operations

Kimberly-Clark (NASDAQ: KMB) will offload its international tissue and professional unit into a new global joint venture with Brazil-based Suzano (NYSE: SUZ), forming a dominant international player while refocusing its portfolio toward higher-margin personal care segments.

Why Kimberly-Clark is spinning off its international tissue business

On June 5, 2025, Kimberly-Clark Corporation, the American consumer goods conglomerate behind brands like Huggies and Kleenex, announced it had entered into a definitive agreement with Suzano S.A., the world’s largest pulp manufacturer, to form a global joint venture in the tissue and professional hygiene product segment. The new entity will absorb substantially all of Kimberly-Clark’s International Family Care and Professional (IFP) operations across 70+ countries.

Under the deal, Suzano will take a 51% controlling interest, with Kimberly-Clark retaining 49%. The transaction assigns the contributed IFP business an implied enterprise value of approximately USD 3.4 billion and is expected to close by mid-2026, pending regulatory approvals.

This strategic divestiture aligns with Kimberly-Clark’s Powering Care transformation strategy introduced in 2024, which aims to streamline operations and shift capital toward higher-growth, higher-return categories such as personal care in North America and select global markets.

Kimberly-Clark’s Powering Care strategy enters next phase

Historically, Kimberly-Clark has operated across a diverse portfolio of tissue, personal hygiene, and professional care products. But amid margin pressure and inflationary headwinds in raw materials, the American multinational initiated a corporate transformation initiative last year to prioritize business segments with stronger competitive moats and brand loyalty.

Chairman and CEO Mike Hsu framed the joint venture with Suzano as “a powerful step forward in the transformation strategy we laid out last year,” emphasizing the company’s sharpened focus on its most profitable operations.

By 2026, the transaction is expected to reshape Kimberly-Clark’s revenue composition, with approximately two-thirds of sales coming from personal care — a category historically tied to stronger brand equity and consumer pricing power. This includes legacy brands like Huggies, Kotex, Depend, and Poise, which hold market leadership positions across multiple regions.

What the Suzano partnership means for global tissue markets

The newly formed venture between Kimberly-Clark and Suzano will be a force in global tissue and professional hygiene markets, integrating fiber manufacturing scale with established consumer-facing brands. The venture will take over more than 40 regional brands and five global labels — including Scott, Kleenex, Viva, WypAll, and Kimberly-Clark Professional — with the latter five licensed under a long-term brand agreement.

The business will span 22 manufacturing facilities and 9,000 employees, with the combined entity positioned to supply both branded and private label offerings. Its product lines will target a wide range of consumers and professional customers across Europe, Asia, Latin America, and other non-U.S. markets.

Suzano, already a major player in pulp and bio-based fibers, gains access to downstream integration in tissue production and distribution. This mirrors broader strategic moves across the pulp and paper industry, where suppliers seek vertical synergies and global brand exposure.

Kimberly-Clark’s Jeff Melucci, Chief Strategy, Business Development and Administrative Officer, said the collaboration “ensures a smooth transition and delivers on the promise inherent in the business,” praising Suzano’s fiber expertise and manufacturing capabilities.

Financial terms and expected earnings impact for Kimberly-Clark shareholders

In 2024, the IFP segment generated USD 3.3 billion in net sales. Following the divestment, Kimberly-Clark expects to receive significant upfront cash proceeds from the joint venture, which the firm has committed to returning to shareholders via share repurchases — net of transaction costs and taxes.

However, the company anticipates a near-term earnings dilution of approximately USD 0.30–0.40 in adjusted EPS in the first full year after the deal closes. Kimberly-Clark noted this dilution is largely tied to the accounting classification of IFP as discontinued operations starting Q2 2025, and to reduced earnings contributions from a now non-controlling interest.

Despite the dilution, the move is being positioned as a long-term value unlock. Kimberly-Clark believes it can extract greater enterprise value through the joint venture structure than it could by continuing to operate IFP independently. Additionally, the deal helps lower Kimberly-Clark’s exposure to commodity-driven input costs, making its financial performance more predictable over time.

Chief Financial Officer Nelson Urdaneta called the transaction a “catalyst for immediate returns and long-term shareholder value,” adding that the partnership will also allow Kimberly-Clark to accelerate growth and innovation in its remaining core segments.

From brand diversification to portfolio realignment

Kimberly-Clark has been a household name for more than 150 years, with its brands like Kleenex and Huggies becoming category-defining in the tissue and diaper markets. Yet over the past decade, the firm has faced intensifying competition in commoditized tissue segments from lower-cost players, particularly in Asia and Latin America.

To counter this, Kimberly-Clark created the IFP division as a stand-alone unit in 2024, setting the stage for a potential spin-off, sale, or partnership. The joint venture with Suzano now completes this strategic arc, freeing Kimberly-Clark to allocate capital and management bandwidth to high-growth, high-margin categories.

According to investor commentary in recent earnings calls, large institutional shareholders have consistently favored such a pivot, citing Kimberly-Clark’s strong brands and underleveraged potential in personal care.

Wall Street analysts have generally welcomed the announcement as a value-creating divestiture. Several investment banks, including Barclays and Jefferies, flagged the deal as a net positive for Kimberly-Clark’s margin outlook, capital return capacity, and strategic clarity.

From an institutional sentiment lens, the market appears to view the Suzano joint venture as a de-risking move, trading volatile input-heavy businesses for capital-light royalty streams and leaner operational structures. Kimberly-Clark’s plan to return transaction proceeds to shareholders through buybacks further reinforces its capital discipline — a priority frequently raised by long-term funds.

Suzano, on its end, continues to expand beyond upstream pulp into integrated downstream businesses, potentially leveraging the joint venture as a global tissue platform.

What’s next for the Kimberly-Clark–Suzano tissue venture

Pending regulatory and customary approvals, the transaction is scheduled to close in mid-2026. At that point, Kimberly-Clark’s contribution of the IFP assets will be fully executed, and operations will commence under the new joint entity.

The agreement includes an option for Suzano to acquire Kimberly-Clark’s remaining 49% stake over time, using a pre-agreed valuation framework. This structure preserves flexibility while offering Kimberly-Clark a future exit pathway.

Kimberly-Clark’s Mexican operations and its joint venture in South Korea are excluded from the deal and will remain under its direct control.

The firm has engaged Centerview Partners and Goldman Sachs as financial advisors, while legal counsel includes Kirkland & Ellis LLP and Baker McKenzie LLP. Suzano is represented by Freshfields LLP.

Kimberly-Clark bets on personal care leadership

With this structural move, Kimberly-Clark is signaling its long-term confidence in branded personal care as the centerpiece of its future growth. By trimming down its global exposure to competitive, margin-thin tissue categories and doubling down on consumer brands with pricing power and loyalty, the American multinational is aiming for a leaner, more focused identity in the post-2026 landscape.

Analysts expect further resource reallocation into product innovation, marketing, and emerging market expansion within personal care — especially in areas like adult incontinence and feminine hygiene, where demographic trends support steady volume growth.

As Kimberly-Clark approaches its second-quarter earnings release in August 2025, investor attention will likely center on margin progression, share repurchase activity, and updates on regulatory timelines for the Suzano venture.