Tylenol’s parent company will combine with the maker of Huggies in a $48.7 billion mega-deal

Huggies maker Kimberly-Clark announced Monday it will buy Tylenol’s parent company Kenvue in a nearly $50 billion deal, creating a massive consumer products conglomerate.

The merger is the latest in a recent dealmaking explosion, signaling the Trump administration’s openness toward corporate acquisitions. But it also represents a gamble that one of Kenvue’s signature products will be able to withstand increased scrutiny.

The acquisition comes a few weeks after President Donald Trump made unfounded claims linking autism to Tylenol use during pregnancy, sending Kenvue’s stock sharply lower. The company has staunchly pushed back against his administration’s accusations.

The companies said that the combined business will bring together 10 billion-dollar brands and will drive annual revenue of $32 billion. The new company will make products that “touch nearly half the global population through every stage of life,” including Johnson’s baby products, Clean & Clear skin care, Kleenex, Listerine mouthwash, and Depends adult diapers, the companies said in a statement.

Kenvue was spun off in 2022 from Johnson & Johnson, with J&J keeping its recognizable name for its larger pharmaceutical business unit and offloading its consumer brands. It was widely expected to be an acquisition target.

The transaction is scheduled to close in the second half of next year. Following the closing, Kimberly-Clark shareholders will own about 54% of the newly combined company, with Kenvue shareholders owning the rest.

The deal comes with some considerable risks.

On Monday, Kenvue reported an overall sales decline of 4.4%, as well as its its self care unit, which includes Tylenol, falling 5.3% for the quarter ending on September 28.

The company explained that the sales declines were the result of “trade inventory reductions in certain customers,” likely that from cash-strapped customers trading down to cheaper, private labels that offer similar quality — perhaps a warning a sign to the new company that’s betting on a lineup of name-brand companies.

And Kenvue faces potentially intense legal scrutiny over the Trump administration’s claims. Last week, Texas Attorney General Ken Paxton filed a lawsuit against Kenvue, claiming that the company “deceptively” marketed Tylenol to pregnant women and that the medication is tied to an increased risk of autism. Kenvue said it will “vigorously defend” against the claims.

Kimberly-Clark CEO Mike Hsu addressed the Tylenol issue on a call with analysts Monday, saying its “board carefully considered all the risks and all the opportunities” and had multiple meetings with “medical, regulatory and legal experts” and decided that the deal is a “generational value creation opportunity for both companies.”

“We stand firmly behind the science and the safety of our products,” added Kenvue CEO Kirk Perry. “These things have been studied for decades, and we continue to stand by that science as the medical community does as well.”

The cash-and-stock deal has Kimberly-Clark (KMB) paying $21.01 for each Kenvue (KVUE) share, a hefty premium over the $14.37 of its Friday closing price.

But the premium is only slightly higher than the $17 a share Kenvue’s stock was trading for just before Trump held his “don’t take Tylenol” news conference on September 22. And it’s only a hair above the $20 stock price right before the first news reports suggested that the Trump administration may make a link between Tylenol and autism.

Kenvue’s stock soared more than 16% Monday. Kimberly-Clark’s stock fell nearly 13%.

The deal comes as the deregulatory environment ushered in with the Trump administration has led to a rush of mergers and acquisitions.

The Kenvue deal is the third-largest acquisition this year, according to mergers-and-acquisitions data provider Dealogic. The $72 billion deal between railroad companies Union Pacific and Norfolk Southern ranks first and Saudi Arabia’s Public Investment Fund purchase of video games maker Electronics Arts for $55 million places second.

After deals cooled off considerably in the post-pandemic era, M&A appears to be back in a big way this year. So far, 2025 has produced $1.9 trillion in deals in the United States, up the highest since 2021, according to Dealogic. Excluding the pandemic-fueled M&A boom, 2025’s deals hold the highest collective value since 2015 and are on pace to surpass it.

The Kimberly-Clark acquisition of Kenvue would be the fourth-largest consumer products deal of all time, behind only Altria’s $111 billion spin-off of Philip Morris International in 2008, British American Tobacco’s 2015 purchase of Reynolds American for $64 billion, and P&G’s 2005 Gillette acquisition for $61 billion.

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