Kimberly-Clark sells majority stake in international tissue unit to Brazil's Suzano

By Anuja Bharat Mistry

June 5 (Reuters) - Kimberly-Clark KMB.N on Thursday struck a deal with Brazilian pulp maker Suzano SUZB3.SA to sell a majority stake in its international tissue business, valuing the business at about $3.4 billion, the Kleenex tissue maker said.

The deal, structured as a strategic partnership, will form a new joint venture in which Kimberly-Clark would hold a 49% stake, while Suzano will pay about $1.73 billion in cash for the 51% stake.

Suzano, which is one of the world's largest pulp maker, will have the option to purchase Kimberly-Clark's ownership interest under certain conditions, the Irving, Texas-based company said. The deal is expected to close in mid-2026.

Several consumer-facing companies such as General Mills GIS.N and PepsiCo PEP.O have ramped up strategic deals over the last year in a bid to boost growth and increase global exposure.

Kimberly-Clark has also been simplifying its operations and reorganizing business to cut costs and focus on more profitable parts such as personal care and North America tissue segments.

"We think the influx of capital (from the deal) will help derisk shares by giving Kimberly-Clark wiggle room during the uncertain macro environment," said Arun Sundaram, analyst with CFRA Research.

Kimberly-Clark on Thursday said it would contribute assets of its international family care and professional business, including 9,000 employees, to its new venture with Suzano, aiming to reduce exposure to volatile input costs and stabilize margins.

The combined business entity would be incorporated in the Netherlands and include 22 manufacturing facilities located in 14 regions such as Europe, Asia, Middle East, Central America.

As part of the JV, Kimberly Clark will retain its consumer tissue and professional businesses in U.S. and its interests in existing joint ventures in Mexico, South Korea and Bahrain, among other countries.

Last year, Suzano was in talks to buy International Paper IP.N, but was unable to reach a deal due to the lack of a price agreement between the parties.