Suzano and Kimberly-Clark form a $3.4 billion global joint venture in tissue market

Suzano, the world’s largest pulp producer, and Kimberly-Clark, one of the leading global personal care companies, have announced the formation of a global joint venture in the tissue and professional products segment. The new company is valued at US$ 3.4 billion and aims to become a major player in the international tissue market.

Under the agreement, Suzano will hold 51% of the joint venture, while Kimberly-Clark retains 49%. The Brazilian company will pay US$ 1.734 billion in cash, subject to customary closing adjustments.

The joint venture will operate in over 70 countries, managing 22 manufacturing facilities across 14 countries in Europe, Asia (including Southeast Asia), the Middle East, South America, Central America, Africa, and Oceania. Together, these plants have an installed production capacity of around 1 million tons annually. In 2024, the businesses involved generated approximately US$ 3.3 billion in net revenue.

The new company will be headquartered in the Netherlands and will market a portfolio of more than 40 regional brands. Additionally, it will operate globally recognized brands such as Kleenex, Scott, Cottonelle, Viva, WypAll, and Kimberly-Clark Professional through a long-term licensing agreement with Kimberly-Clark.

The agreement excludes Kimberly-Clark’s operations in the United States, as well as its joint ventures in Mexico, South Korea, and Bahrain.

“This new company brings together two global players that are leaders in their respective sectors, with complementary capabilities that combine Suzano’s industrial knowledge and efficient operational management with Kimberly-Clark’s expertise in building and managing brands and in marketing and sales of regional and global brands, as well as its extensive experience in managing operations in multiple regions around the world”, said Beto Abreu, CEO of Suzano.

STRATEGIC AND FINANCIAL BENEFITS OF THE PARTNERSHIP

The creation of the joint venture results in an international company that stands out in the tissue and professional products segment, opening new and significant opportunities for operational efficiency gains. Since the establishment of Kimberly-Clark Professional (IFP) as a separate company in 2024, Kimberly-Clark has managed to increase its margins and expand its market share. The partnership with Suzano will allow this full potential to be realized.

By combining the industrial capabilities and infrastructure of both companies, the joint venture is expected to reduce the total costs of delivered products, benefiting both consumers and customers by offering a wide range of products, including private label and licensed brands, across various markets.

Furthermore, the transaction reinforces Kimberly-Clark’s strategic focus on its “Powering Care” initiative, concentrating on proprietary areas with higher growth potential. With operations centered on the higher-margin and expanding segments – North America and International Personal Care – Kimberly-Clark is directing its portfolio toward its iconic and global brands. Upon completion of the transaction, approximately two-thirds of Kimberly-Clark’s net revenue are expected to come from personal care categories, driving sustainable growth, profitability, and return on investment over the long term.

From a financial perspective, the joint venture is expected to create more value for shareholders than Kimberly-Clark would by managing IFP alone. The company will receive a significant cash injection, which is intended to be returned to shareholders through share repurchases after the transaction closes, optimizing capital returns for its investors.

Finally, the partnership should contribute to more efficient cost management. By reducing its exposure to volatile input costs, Kimberly-Clark will enhance its ability to generate more predictable and consistent margin and profit growth over time, strengthening the company’s financial stability.

GOVERNANCE AND EXPECTATIONS FOR COMPLETION

Upon completion, the joint venture will be governed by a Board of Directors composed of five members – three appointed by Suzano and two by Kimberly-Clark. The agreement also grants Suzano an option to acquire the remaining 49% stake held by Kimberly-Clark under a defined valuation framework.

The deal is subject to customary regulatory approvals and conditions and is expected to be finalized in mid-2026.