The CEO behind Kimberly-Clark's $40 billion gamble on Tylenol maker

Mike Hsu aims to stoke the consumer company's growth by veering into Kenvue's higher-margin but risky health products

- Natasha Khan, Lauren Thomas & Peter Loftus

When Mike Hsu took over managing KimberlyClark's operations close to a decade ago, all but one of its 23 businesses were struggling. Hsu told his team, "Hey, we're going to fix this plane while we're flying it.

Since then, the veteran consumerproduct executive has helped the units make gains, but could only do so much selling Huggies diapers, Kleenex tissues and Scott paper towels.

So Hsu, now Kimberly-Clark's chief executive, has embarked on an audacious new pivot for his company. Hsu said Monday that the company would buy Tylenol maker Kenvue in a $40 billion deal—one of the biggest in the history of the consumer sector—and take a leading position in the higher-margin but less familiar market for consumer-health products.

"Everything led us to health and wellness," Hsu told analysts and investors after the deal was announced. "I really wanted the company to have greater exposure to higher growth and higher margin categories."

If approved by shareholders and regulators, the combined company promises to sell must-have products to consumers at all stages of their lives. New parents could get Kimberly-Clark's Huggies diapers alongside Kenvue's Johnson's Baby shampoo, while adults could pick up everything from Kotex sanitary napkins to Nicorette smoking cessation gum and Depend adult diapers.

Hsu is gambling big that the move into health-and-wellness will provide the kind of growth that Wall Street has sought but Kimberly-Clark's consumer staples haven't delivered to date.

And by acquiring Kenvue, Hsu would take on the challenges that have been confronting the company, which was spun out of Johnson & Johnson in 2023 and became an activist target. Kenvue shares had lost more than a third of their value this year to date before the deal announcement.

The most recent drag was President Trump's warning that Tylenol's main ingredient could cause autism, which investors feared could fuel personal-injury lawsuits.