Suzano Set for EU Approval on $3.4B Kimberly-Clark JV

Deal Nears Unconditional EU Approval

Brazil's Suzano, the world's largest pulp maker, is expected to secure unconditional EU antitrust approval for its $3.4 billion joint venture with U.S. consumer goods giant Kimberly-Clark. Sources indicate the European Commission sees no competition concerns and will grant a green light following its preliminary review ending May 11.

Joint Venture Overview

The deal, announced last year, will see Suzano take a 51% controlling stake in Kimberly-Clark's international tissue business. This business includes well-known brands such as Kleenex, Scott, and Cottonelle, encompassing 22 manufacturing facilities across Europe, Asia, and other regions. Kimberly-Clark will retain the remaining 49% stake, with Suzano holding a call option to acquire it later.

Regulatory and Market Context

While the EU approval is a significant step, the transaction remains under investigation by the UK's Competition and Markets Authority, which is due to decide by May 28. This deal occurs as the global paper industry undergoes consolidation to address falling demand and structural overcapacity, while consumer goods companies face rising operational costs.

Summary

With unconditional EU approval imminent, all eyes now turn to the UK regulator's decision. The outcome will be a key development for the consolidating paper industry as it navigates significant market pressures.

FAQ

Q: What is the value of the Suzano and Kimberly-Clark deal?
A: The joint venture is valued at approximately $3.4 billion.

Q: Which regulatory bodies are reviewing the deal?
A: The European Commission is set to grant unconditional approval, while the UK's Competition and Markets Authority is still conducting its investigation.

Source: Investing.com