September 21, 2024
BANGOR DAILY NEWS (BANGOR, MAINE

Paper giants’ merger approved with conditions> Justice Department orders Scott Paper’s baby wipes, Scotties businesses sold in Kimberly-Clark deal

DALLAS — Kimberly-Clark Corp. has moved closer to completing its $9.4 billion acquisition of Scott Paper Co., but had to agree that Scotties facial tissue won’t join the expanded products lineup that includes Kleenex.

Shareholders of both companies approved the deal Tuesday and European regulators said it could move forward. But because of the powerful marketing clout the new company would have, the Justice Department required selling Scott’s baby wipes and Scotties facial tissues businesses before giving its OK.

“Tissues and baby wipes are used by millions of American families every day across the country. We can’t allow a merger to proceed that could raise prices of these household necessities,” said Assistant Attorney General Anne K. Bingaman, head of the department’s antitrust division.

Under the original merger deal, the combined company would have controlled 59 percent of the $1.34 billion in annual sales of facial tissues and 56 percent of the $500-million-a-year baby wipes market, the department said.

“I don’t think that is anything that they can’t work out,” said Wesley Moultrie, an analyst at the credit rating agency Duff & Phelps Corp. “Baby wipes are a small part of the business.”

The marriage of Kimberly-Clark and Scott would create a consumer products company with about $12 billion in annual revenue and brand names like Kleenex, Scott, Huggies, Kotex and Depend. It will be the nation’s second-largest such company after Procter & Gamble Co.

Shareholders of Kimberly-Clark, based in Irving, Texas, voted shortly before noon Tuesday to approve the transaction, following earlier balloting by stockholders of Boca Raton, Fla.-based Scott Paper.

The stock-swap deal was valued at $6.8 billion when it was first announced in July. But a roaring bull market has lifted the transaction’s price tag to $9.4 billion.

Kimberly-Clark rose $1.62 1/2 to $78.50 in trading on the New York Stock Exchange. That price compares with $58.62 1/2 a share before the deal to exchange 0.78 share of Kimberly-Clark for each Scott Paper share was announced.

The new company will be called Kimberly-Clark.


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