Suzano Expected to Get EU Nod for $3.4B Joint Venture with Kimberly-Clark
By Foo Yun Chee
Overview of Suzano and Kimberly-Clark Joint Venture
EU Antitrust Approval Process
BRUSSELS, May 5 (Reuters) - Brazil's Suzano, the world's largest pulp maker, is set to win unconditional EU antitrust approval for its $3.4 billion joint venture with U.S. consumer goods giant Kimberly-Clark, two people with knowledge of the matter said.
The full approval, previously unreported, would be a boost for the deal announced in June last year, which will see Suzano take a 51% stake in Kimberly-Clark's international tissue business that includes popular brands such as Kleenex.
Other Regulatory Investigations
The deal is also being investigated by the UK watchdog.
Market Context and Industry Trends
Regulatory Scrutiny and Geopolitical Factors
Businesses in recent months have faced intense scrutiny over their deals as regulators seek to balance the interests of consumers with geopolitics, sustainability benefits, and calls to take a more lenient line to create European champions.
Consolidation in the Global Paper Industry
The global paper industry is also facing a wave of consolidation as it grapples with falling demand and structural overcapacity. Consumer goods makers are facing surging energy, fuel and freight costs linked to the war in Iran.
Details of the Joint Venture
EU Commission’s Decision
The European Commission, which acts as the EU antitrust enforcer, will give the unconditional green light following the end of its preliminary review on May 11 as it does not see any competition concerns, the people with direct knowledge said.
Reactions from Stakeholders
The EU watchdog declined to comment. Suzano did not have an immediate comment when contacted by Reuters. Kimberly-Clark did not respond to emailed requests for comment.
Structure and Scope of the Joint Venture
The deal will create a JV controlling Kimberly-Clark's international tissue business with brands also including Scott and Cottonelle. Suzano will hold a 51% stake and Kimberly-Clark 49%. Suzano has a call option to acquire its partner's stake.
Global Reach and Operations
The joint venture would include 22 manufacturing facilities in 14 countries across Europe, Asia, the Middle East, South America, Central America, Africa, and Oceania.
UK Competition Agency Review
The UK competition agency CMA opened an investigation into the deal in March, with a decision due on May 28.
(Reporting by Foo Yun Chee; Editing by Adam Jourdan and Keith Weir)
