Kimberly-Clark’s potential sale of its international tissue business has drawn interest from companies including Royal Golden Eagle, Brazil’s Suzano () and Asia Pulp & Paper, according to people familiar with the situation. heard by Bloomberg News. The unit could be valued at around $4 billion, said one of the people, who asked not to be identified because it is a private matter. Deliberations are ongoing and may not lead to a transaction, the people said.
Representatives for Kimberly-Clark and Royal Golden Eagle declined to comment. Representatives for Suzano and Asia Pulp & Paper did not immediately respond to requests for comment. Also read: Kimberly-Clark studying options for international tissue arm, sources say Bloomberg News reported in October that Kimberly-Clark was working with consultants to analyze its tissue operations outside of North America, potentially leading to a part sale or the entire business.
The Dallas-based company said in March it would reorganize its operations to combine its overseas consumer tissue and professional tissue businesses under a new division called International Family Care & Professional, which generates about $3.5 billion in annual sales with operating margins of around 10%. Kimberly-Clark is expected to announce its 2024 results on January 28. In October, the company lowered its full-year organic sales forecast after reporting weaker-than-expected results. Organic sales, which strip out currency volatility and other items, were expected to rise 3% to 4%, below the previous forecast for a mid-single-digit gain.
The company’s shares have fallen 12% since then, giving Kimberly-Clark a market value of about $42 billion.
In Bradesco BBI’s view, although a possible agreement is aligned with Suzano’s long-term agenda of seeking growth in products downstream In more mature markets, management has been quite vocal in saying that the company will not move forward with any sizable mergers and acquisitions.
“This, combined with Kimberly-Clark’s exposure to tissue, which does not appear to be aligned with Suzano’s priorities, leads us to believe that the aforementioned agreement is unlikely to materialize,” assesses the bank.
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(com Bloomberg)
