Kimberly-Clark's High-Stakes Bet Against The Significant Odds Of M&A
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Kevin Anthony D. Arroyo455 FollowersFollow5ShareSavePlay(21min)CommentsSummaryLast November 3, 2025, Kimberly-Clark announced a cash and stock acquisition of Kenvue for an enterprise value acquisition of around $48.7 billion.Combining two low-growth, mature businesses is unlikely to solve growth challenges and will instead introduce significant operational and integration risk.The significant size of the deal relative to KMB's market value makes this a bet-the-company-like acquisition, which usually never ends well for the acquirer's shareholders.The use of stock as the main currency of the acquisition makes me suspicious that the management is confident about this deal.Due to the high failure rate of M&A, potentially complex integration, and the size of the acquisition, I will call a 'Sell' rating for KMB. narvo vexar/iStock via Getty Images Downside Thesis Kimberly-Clark Corporation(KMB) announced the acquisition of Kenvue(KVUE) for a sum of $40 billion in a cash and stock deal last November 3, 2025. In the deal, Kenvue shareholders will receive $3.5 per shareThis article was written byKevin Anthony D. Arroyo455 FollowersFollowMy investing approach is finding companies with leadership economics associated with their business models and selling at a reasonable price. My articles will primarily discuss a company's strategy to drive growth, competitive advantage that drives superior return on capital, capital structure, capital allocation, and management incentives. I consider myself a value investor looking for permanent ownership of strong companies with trustworthy management.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You