Kimberly-Clark offers bonds to help fund Tylenol maker takeover

Kimberly-Clark Corp. is selling investment-grade bonds in as many as five parts to help fund its pending acquisition of Tylenol maker Kenvue Inc.

The consumer-goods company is offering notes in as many as five parts with maturities of two to 10 years, according to a person with knowledge of the matter, who asked not to be identified because the details are private. Initial price discussions for the longest tenor involve a premium of about one percentage point above U.S. Treasuries, the person added.

Kimberly-Clark held investor calls on Friday, amid a turbulent period for markets. Numerous companies held off on bringing high-grade bond sales last week as Treasury yields swung sharply on stronger-than-expected U.S. inflation data and worries about the artificial-intelligence trade.

The Kleenex maker’s third-quarter report is due on Nov. 5. Companies typically don’t issue bonds in the roughly two-week period before disclosing results.

JPMorgan Chase & Co. provided US$7.7 billion in bridge financing late last year to help fund the acquisition. The bond sale is expected to replace that temporary borrowing facility. Other banks managing the bond sale are Citigroup Inc. and Morgan Stanley, the person said.

The largely-stock acquisition, expected to close by the end of the year, is currently valued at about US$36 billion. Compensation is set to include US$6.7 billion of cash that would in part come from new debt sales, Kimberly-Clark has previously said.

Kenvue has struggled financially since being spun off from Johnson & Johnson in 2023, and the company found itself battling with the Trump administration last year over the safety of its biggest product, Tylenol. Its portfolio also includes Neutrogena lotion, Listerine mouthwash, Benadryl allergy medicine and Band-Aid wound care products.

Kimberly-Clark said when the combination was announced last year that buying Kenvue would create a company with US$32 billion in revenue and allow it to surpass Unilever PLC to become the second-biggest seller of health and wellness products after Procter & Gamble Co.