Kimberly-Clark plans to sell its international tissue business to Brazil’s Suzano for $3.5 billion. The move is part of the company’s effort to focus on its stronger products and grow in key markets.
Kimberly-Clark Is Making a Big Move
Kimberly-Clark, the well-known maker of Kleenex tissues and Huggies diapers, is about to make a major change. The company is close to selling its international tissue business to Brazilian company Suzano for around $3.5 billion.
This part of the business makes and sells tissues outside the U.S. While it has a big reach, it hasn’t been performing as well as other parts of the company. So, Kimberly-Clark is choosing to step away from it and concentrate on what it does best.
Refocusing on What Works
Kimberly-Clark recently reorganized its business into three areas: its North American division, personal care products sold globally, and the international tissue unit it now plans to sell. Out of the three, the tissue division is the smallest and brings in the least profit. That’s one reason why the company is ready to let it go.
The company’s most successful part is its North American business, which brought in more than $11 billion last year. Its international personal care division, things like baby products and hygiene items, also continues to grow. By focusing on these areas, Kimberly-Clark hopes to become stronger and more efficient.
Why Suzano Wants the Deal
Suzano has made a good decision in doing this. Last year, the Brazilian company got its hands on Kimberly-Clark’s tissue business in Brazil, and now it is ready to expand again. If the merger proceeds, Suzano’s position in the international market will increase, and they will play a larger role in the tissue industry.
What’s Next for Kimberly-Clark
This isn’t the first time Kimberly-Clark has sold part of its business. A year ago, it sold its protective apparel unit to an Australian company. Now, it plans to invest $2 billion in its U.S. factories over the next five years. This shows a clear push to grow its business at home.
If all goes as planned, this new deal will help Kimberly-Clark focus on what it does best, serving everyday needs with trusted products, while leaving behind less profitable ventures.
