Kimberly-Clark Completes $9.4-Billion Purchase of Scott : Paper: Firm likely to cut jobs, take hefty charge and sell several units.
Kimberly-Clark Corp. completed its $9.4-billion purchase of Scott Paper Co. on Tuesday after reaching an agreement with antitrust regulators over the sale of some assets.
Under a sweeping restructuring as part of the acquisition, Kimberly-Clark is expected to sell several non-consumer businesses, fire workers and take a charge of as much as $1.5 billion.
Company Chairman Wayne Sanders is scheduled to provide details of the restructuring to analysts in New York today. Executives at both companies discussed parts of the strategy with analysts in recent weeks, though the final plan may be more aggressive than first thought, some analysts said.
“They’re talking about a $1.5-billion charge, and that covers a lot of things,” said Mark Diverio, an analyst with UBS Securities in New York.
The restructuring follows Tuesday’s votes by both companies’ shareholders to approve the acquisition of Scott Paper. The purchase creates the nation’s second-largest consumer products company, whose $12 billion in annual sales is behind Procter & Gamble Co.
The new, larger Kimberly-Clark is expected to focus on its consumer products, which include Scott bathroom tissue, Viva paper towels, Kleenex tissue, Huggies diapers and Kotex feminine hygiene products.
Some investors like that decision. Kimberly-Clark shares were up $1.625 at $78.50, while Scott Paper shares rose $1.50 to $61.125, both on the New York Stock Exchange.
Scott Paper shareholders received 0.78 share of Kimberly-Clark stock for each Scott Paper share under terms of the acquisition, which was announced July 17. Scott Paper has 152.19 million shares outstanding.
Kimberly-Clark said it reached agreement with antitrust regulators over the sale of some assets.
To resolve complaints by federal and Texas state authorities that the merger would hurt competition, Kimberly-Clark agreed to sell Scott’s Scotties facial tissue business and its Baby Fresh, Wash a-bye Baby and Kid Fresh baby wipes businesses, Justice Department officials said.