This article is reprinted from: China Venture, authored by Chen Mei. Lieyun Network has been authorized.
In the consumer circle, there has never been a shortage of significant acquisition news. First, Starbucks China changed hands, with Boyu Investment acquiring a 60% stake for $4 billion, forming a joint venture; then Kimberly-Clark spent $48 billion (approximately 346.9 billion yuan) to acquire Kenvue, a leader in health care.
As an old-established diaper giant in the U.S., Kimberly-Clark's acquisition is seen as a powerful cross-sector collaboration. Similar to Starbucks China, Kimberly-Clark has also chosen to carry out the acquisition by merging to form a new company, which is expected to be completed in the second half of 2026.
Some analysts believe that this acquisition is not only a "cross-border partnership" between two giants, but also, with a transaction value exceeding $48 billion, it has set a new record for transactions in the consumer goods sector, becoming one of the largest acquisitions in the history of the U.S. consumer goods industry.
Diaper Giant "Takes Over" Band-Aid King
For these two companies, the most impressive aspect for the public is probably their products. As a diaper giant, Kimberly-Clark is known for its "long history": the company was established in 1872 and owns multiple brands such as Kotex, Kleenex, and Huggies, covering fields like feminine care, baby care, and household paper products.
The acquired company, Kenvue, is a consumer health business. Although this company was spun off from Johnson & Johnson in 2023 and subsequently listed on the New York Stock Exchange, it carries "prestigious genes," with its market value surpassing $50 billion on the first day of trading, making it one of the largest IPOs in the U.S. that year.
From the perspective of business scope, this acquisition also extends Kimberly-Clark's business domain. Before the acquisition, Kimberly-Clark, which produced diapers and feminine care products, had no connection with the family health care sector. In this field, Kenvue has long been hailed as the "all-around leader," with well-known brands under its umbrella such as Band-Aid, Tylenol, and Neutrogena.
Especially in the band-aid sector, Kenvue's Band-Aid holds a 57% market share, firmly ranking first in the U.S. band-aid market; in the non-medicated band-aid sector, its market share reaches a dominant level of 70%-80%.
Kimberly-Clark Chairman and CEO Mike Hsu said, "This acquisition is a key step in Kimberly-Clark's development journey. We look forward to working with Kenvue to integrate the two companies and create significant value for the shareholders of the combined company."
Notably, unlike previous acquisition cases where the acquirer purchased equity from an existing single shareholder, this time Kimberly-Clark adopted a "cash + stock transaction" approach to acquire all outstanding common shares of Kenvue on the secondary market.
Based on the closing price of Kimberly-Clark's common stock on October 31, 2025, Kenvue's shareholders are entitled to receive $3.50 in cash and 0.14625 shares of Kimberly-Clark stock per share, bringing the total consideration to $21.01 per share, which corresponds to an enterprise value of approximately $48.7 billion for Kenvue, or 346.9 billion yuan.
Based on Kenvue's adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) over the past 12 months, the valuation multiple of this transaction is 14.3 times; if synergies are included, it is approximately 8.8 times, reflecting the market's recognition of Kenvue's profitability and growth potential.
An investor said that this valuation logic clearly adopts the relative valuation method. "On the one hand, Kenvue's current market value is more than 30 billion US dollars, on the other hand, this price includes synergy expectations, brand and market strategy and other factors."
In terms of synergies, Kimberly-Clark explicitly stated that this part is valued at approximately $2.1 billion, covering two major dimensions: cost savings and revenue growth; in terms of brand and strategic positioning, Band-Aid's dominant position in the band-aid field, Tylenol's reputation in the fever and pain relief market, and Listerine's advantages in the mouthwash category, all form the health care matrix advantage.
It can be seen that this deal represents a mutual embrace between two giants. According to the plan, the newly merged company will boast 10 brands with annual sales exceeding 1 billion US dollars each.
Hard to Conceal Kenvue's Two Major Legal Concerns
Despite Kenvue owning several well-known health consumer brands and the total acquisition price reaching $48.7 billion, it is difficult to conceal Kenvue's performance pressure and legal concerns.
Latest financial reports show that Kenvue's net sales in the third quarter continued to decline. Specifically, net sales in the third quarter of 2025 were $3.76 billion, a year-on-year decrease of 3.5%, with organic sales falling by 4.4%. Organic sales reflect the performance of the company’s core business, demonstrating the market performance and operational capabilities of its core operations.
In the decline of organic sales, all three segments—personal care, skin health and beauty, and essential health—experienced drops. Among them, the skin health and beauty segment saw a relatively larger decline, reflecting the intensifying market competition and challenges posed by changing consumer demands.
As the core region, Kenvue's sales in the North American market have also significantly declined, and the Asia-Pacific region has experienced consecutive quarters of decline, further reflecting a reduction in consumer recognition of the Kenvue brand.
Behind this decline in brand recognition lies a series of public opinion crises that Kenvue has faced since the beginning of this year. In particular, former U.S. President Trump claimed that Tylenol, a product under Kenvue, could cause autism in children, further exacerbating the crisis.
In October this year, Texas also sued Johnson & Johnson and its subsidiary Kenvue, accusing the two companies of concealing the risk that pregnant women taking Tylenol could lead to autism and other diseases.
Despite Kenvue's response that these allegations are baseless and its insistence that its medication is safe for pregnant women, while also noting that pain and fever in pregnant women themselves could pose risks to the fetus, this failed to prevent a sharp decline in Kenvue's stock price.
In the capital market, Kenvue's stock price fell from a high of $24 in May this year to a low of $14 in October, marking a 40% decline. From September to October, influenced by Trump’s statements and the Texas lawsuit, Kenvue's stock price dropped by 21% and 11.46%, respectively, wiping out over $17 billion in market value.
To make matters worse for Kenvue, the company is also facing lawsuits over claims that talcum powder causes cancer. In October 2025, Kenvue was sued by thousands of consumers in the UK, who alleged that its baby powder contained asbestos fibers, leading to diseases such as ovarian cancer and mesothelioma. The lawsuit, filed by KP Law on behalf of more than 3,000 plaintiffs, involves users from the period between 1965 and 2023.
In the United States, Kenvue's former parent company, Johnson & Johnson, has been ordered to pay nearly 7 billion yuan (approximately 6.89 billion yuan) due to lawsuits over its baby powder causing cancer.
The consumer sector remains a fertile ground for wealth creation.
In the consumer goods industry, mergers and acquisitions are never a game of capital, but a deep integration of brands, channels, and consumer mindsets.
In this acquisition, Kimberly-Clark, as the buyer, brings value through its distribution channels, from Walmart's large supermarkets to online social e-commerce platforms—this diaper giant knows how to get products to consumers as quickly as possible. Kenvue, as the acquired party, has core strengths rooted in its healthcare heritage from Johnson & Johnson, along with robust research and development capabilities.
Kimberly-Clark's choice of Kenvue lies in its desire, as a company with strong channel control, to fill those channels with high-value, essential consumer goods in the family health category. The combination of the two is also seen by the market as having the potential to create a "family health and personal care" supergiant.
In fact, historically, there have been many successful M&A cases in the daily consumer goods sector. For instance, in 2005, Procter & Gamble acquired Gillette for a staggering $57 billion. Gillette’s razor and blade business complemented P&G’s personal care product line, allowing P&G to enter the male grooming market and expand its product coverage.
However, this acquisition was once questioned at the time for being "overpriced and difficult to integrate." As it turned out, in the first fiscal year after the acquisition was completed, Procter & Gamble's overall profit surged by 25% to reach $8.68 billion, with sales revenue increasing by 20% to hit $68.22 billion.
Moreover, after L'Oréal acquired Maybelline for $758 million, the latter achieved significant growth in performance. Before being acquired by L'Oréal, only 7% of Maybelline's market share came from markets outside the United States. Following the acquisition, L'Oréal relocated Maybelline’s headquarters from Memphis to New York and changed its trademark to "Maybelline New York." This strategy proved highly effective: by 2001, of the $1 billion in sales generated by Maybelline, 56% came from overseas markets, including 90 countries.
Notably, in the current era where AI is disrupting all industries, consumer investment may not seem to have a "sexy" narrative, but this field has created multiple wealth myths.
The most vivid example is Nongfu Spring, which engages in drinking natural water and fruit and vegetable juice beverage businesses. Its founder, Zhong Shanshan, has once again topped the list of China's richest individuals for the fourth time, with a net worth reaching 530 billion yuan. Data shows that the main reason for the increase in wealth is the performance growth of Nongfu Spring and its subsidiary, Wantai BioPharm.
In 2025, the sales volume of Nongfu Spring's high-end water series increased by 38% year-on-year, and the market share of its tea beverage business broke through 25%. Coupled with the overseas market breakthrough of Wantai Biologics' vaccine products, its wealth grew by 190 billion yuan compared to last year.
An investor said: "AI technology companies emphasize high R&D and light assets, while the biggest feature of consumer goods companies is cash flow. When drinking water such as Nongfu Spring is frequently purchased by consumers, this kind of consumer goods has become a 'necessity' in daily life."
Similarly, the daily use of soy sauce, cooking wine, and other seasonings has also given rise to several billionaires with over 10 billion yuan in wealth. According to the Hurun Rich List, Pang Kang, the founder of Haitian Flavouring and Food Company, a leading player in China's seasoning industry, ranked 163rd on the list with a fortune of 100 billion yuan, marking an increase of 21 billion yuan from the previous year. His wealth scale is second only to the He Xiangjian family of Midea in Foshan, Guangdong.
More impressively, Haitian Flavour Industry has also "benefited" several core management members: On the 2025 Hurun Global Rich List, Vice President Cheng Xue ranked 774th with a wealth of 33.5 billion yuan, an increase of 6 billion yuan from the previous year; core executives Pan Laican and Lai Jianping also made the list with 17 billion yuan and 14 billion yuan respectively, creating a rare "one factory creates four wealthy individuals" myth in the industry.
This means that although the daily consumer goods sector lacks the technological halo and sexy story of AI, it remains a fertile ground for generating wealth.
This time, as the acquired party, Kenvue's stock price surged 12.32% on the day the acquisition news was announced, with its market value rebounding to over $300 billion. However, for the acquirer, possibly due to Kenvue's sluggish performance and legal litigation risks, Kimberly-Clark's stock price plummeted nearly 15% on the day of the acquisition, with its market value shrinking to around $340 billion.
Thus, whether Kimberly-Clark's cross-sector move is a "low-price acquisition" or a "high-price takeover" remains to be seen.