The Competition and Markets Authority (CMA) has formally launched a merger inquiry into the anticipated joint venture between Suzano and Kimberly-Clark Corporation, marking the next regulatory step for the proposed $3.4 billion (£2.5bn) deal.
The competition watchdog confirmed on Friday that it has issued a notice to the parties, initiating its phase 1 investigation. The CMA now has until 28 May to decide whether the transaction raises sufficient competition concerns to warrant a more in-depth phase 2 probe.
First announced in June 2025, the deal will see Brazil’s Suzano, the world’s largest pulp producer, acquire a 51 per cent controlling stake in a newly created joint venture, with Kimberly-Clark retaining the remaining 49 per cent. Suzano is set to pay $1.734bn in cash for its share, subject to customary adjustments.
The new entity, to be incorporated in the Netherlands, will focus on the manufacture, marketing and distribution of consumer and professional tissue products, including toilet paper, paper towels, napkins and facial tissues. It will operate across more than 70 countries, supported by a network of 22 manufacturing facilities spanning 14 countries across Europe, Asia, the Middle East, Africa and the Americas.
Combined, the assets earmarked for the joint venture generated approximately $3.3bn in net sales in 2024 and have the capacity to produce around 1 million tonnes of tissue annually. Around 9,000 employees are expected to transfer into the new business.
As part of the agreement, Kimberly-Clark, a global leader in the consumer staples industry, will retain its consumer tissue and professional operations in the US, along with its interests in existing joint ventures in markets such as Mexico, South Korea and Bahrain.
The transaction also includes the transfer of more than 40 regional brands from Kimberly-Clark’s international family care and professional portfolio into the new company. In addition, the joint venture will enter into a long-term licensing agreement to use a number of Kimberly-Clark’s global brands, including Kleenex, Scott, Cottonelle, WypAll, Viva and Kimberly-Clark Professional.
Suzano is currently a leading player in toilet paper in Brazil, following the 2023 acquisition of Kimberly-Clark’s Brazilian tissue assets and brands.
Governance of the new company will be shared, with a five-member board comprising three directors appointed by Suzano and two by Kimberly-Clark. The agreement also grants Suzano a call option to acquire Kimberly-Clark’s remaining 49 per cent stake in the future.
The deal remains subject to regulatory approvals and other customary conditions, including an internal corporate reorganisation by Kimberly-Clark. It is currently expected to complete in mid-2026, pending clearance from competition authorities including the CMA.
The CMA’s review comes as Kimberly-Clark is also progressing with a separate deal to acquire consumer health major Kenvue.
In January, both firms secured overwhelming shareholder backing for their proposed $48.7bn merger, which would bring together Kimberly-Clark’s tissue and personal care portfolio with Kenvue’s consumer health stable spanning names like Listerine, Neutrogena and Tylenol, forming what the companies have described as a global health and wellness leader.
Subject to regulatory approvals and customary conditions, that deal is expected to complete in the second half of 2026 and would create a combined group with annual revenues of around $32bn.