Parties: Kimberly-Clark Corporation (U.S.) / Suzano S.A. (Brazil) / Arbex (new company)
New Company Domicile: Netherlands; operational headquarters in London
Sector: Consumer goods, tissue and hygiene products, professional paper products
Joint Venture Value: $3.4 billion
Ownership: Suzano 51 percent / Kimberly-Clark 49 percent
Cash Payment at Closing: Suzano paid Kimberly-Clark approximately $1.734 billion in cash
Status: Completed — Arbex commenced independent operations on July 1, 2026

Arbex was formed from the carve-out of Kimberly-Clark's International Family Care & Professional business unit. The new company operates:

• In more than 70 markets across the globe
• Through 22 manufacturing facilities in 14 countries
• Under long-term brand license agreements for Kleenex, Scott, Cottonelle, Andrex, WypAll, and Viva

The brand licenses are a structural feature of the transaction: Kimberly-Clark retains ownership of the underlying intellectual property while Arbex holds the right to manufacture and sell under those marks in its licensed territories. This separation of brand ownership from operating company is a common feature of large consumer goods carve-outs and creates ongoing contractual interdependence between the parties even after operational separation.

Kimberly-Clark's perspective
The carve-out allows Kimberly-Clark to separate its international tissue and hygiene assets from its balance sheet and operational focus. The company retains its North American core business and the underlying brand intellectual property, while converting a capital-intensive international manufacturing and distribution operation into a minority stake in a joint venture and a significant upfront cash receipt. This is a balance sheet optimization and strategic focus transaction as much as it is a sale.

Suzano's perspective
Suzano is the world's largest pulp producer. The joint venture gives it direct downstream exposure to consumer tissue brands — converting raw material and pulp production capability into branded consumer goods revenue. This is a vertical integration play: Suzano gains access to the end-consumer market while supplying a significant portion of Arbex's pulp requirements from its own production base. The 51 percent controlling stake reflects Suzano's intent to operate and develop the business rather than hold a passive financial interest.

This transaction does not fit neatly into any single M&A category. It combines several distinct legal and commercial structures:

Global Carve-Out
Kimberly-Clark separated a defined business unit — the International Family Care & Professional segment — from its broader corporate structure. This required identifying and transferring assets, contracts, employees, and liabilities across 14 countries, each with its own employment law, regulatory requirements, and transfer mechanics.

Joint Venture Formation
Rather than a straightforward sale, the transaction created a new jointly owned operating company. The governance structure — including board composition, decision-making rights, deadlock resolution, and exit mechanisms — is a critical element of the ongoing relationship between the parties.

Long-Term Brand License
Kimberly-Clark retains ownership of the Kleenex, Scott, Cottonelle, Andrex, WypAll, and Viva trademarks. Arbex operates under licenses that define territory, term, quality standards, royalty obligations, and termination rights. The durability and enforceability of these licenses is central to Arbex's business model and its ability to attract financing and investment.

Manufacturing Asset Transfer
22 manufacturing facilities in 14 countries were transferred to Arbex. Each facility transfer involved local regulatory approvals, environmental assessments, title transfer mechanics, and employee consultation or transfer obligations under applicable local law.

The transaction received clearance from both major competition authorities that reviewed it:

• European Commission: Granted unconditional approval — the combination of Suzano's pulp production and Kimberly-Clark's tissue brands was not found to raise competition concerns at the EU level
• UK Competition and Markets Authority: Cleared the transaction without referral to a Phase 2 investigation

The clean regulatory outcome reflects the complementary rather than overlapping nature of the parties' businesses: Suzano is a raw material producer, not a competing tissue brand operator, and Kimberly-Clark's international tissue business does not compete directly with Suzano's existing operations.

Arbex is a structurally complex transaction that illustrates several workstreams practitioners should anticipate in large-scale global carve-outs:

Carve-Out Due Diligence

• Identification and separation of assets, contracts, employees, and liabilities attributable to the carved-out business unit across 14 jurisdictions
• Shared services, IT systems, and supply chain dependencies that require transition service agreements (TSAs) to bridge the operational separation period
• Stranded cost analysis — costs that Kimberly-Clark incurred at the corporate level that must be reallocated or eliminated following the carve-out

Brand License Agreements

• Territory definitions, exclusivity provisions, and quality control obligations
• Royalty rate structures and audit rights
• Termination triggers and consequences — including what happens to manufacturing assets and employees if a license is terminated
• Interaction between brand license terms and Arbex's ability to raise third-party debt financing

Manufacturing Facility Transfers

• Local title transfer mechanics and regulatory approvals in each of the 14 countries
• Environmental liability allocation — historical contamination at transferred facilities
• Employee transfer obligations under local law (TUPE in the UK, equivalent regimes in EU member states, and varying frameworks in non-EU markets)

Joint Venture Governance

• Board composition and voting thresholds for reserved matters
• Deadlock resolution mechanisms
• Call and put option structures — Suzano's path to full ownership and Kimberly-Clark's exit rights
• Non-compete and non-solicitation provisions

Supply Chain Integration

• Pulp supply agreements between Suzano and Arbex — pricing, volume commitments, and term
• Transition arrangements for third-party supply contracts previously held by Kimberly-Clark

The Arbex transaction is relevant to Turkish consumer goods companies, manufacturers, and investors in several respects:

• Carve-out model for Turkish conglomerates — Turkish holding companies with diversified consumer goods portfolios increasingly face pressure to separate underperforming or non-core business units. The Arbex structure — carve-out plus joint venture plus brand license — offers a template for transactions where outright sale is not the preferred outcome
• Brand licensing as a transaction tool — Turkish companies with established domestic brands considering international expansion or joint venture structures can use brand license agreements to retain intellectual property ownership while sharing operational risk with a partner
• Manufacturing asset transfers across multiple jurisdictions — Turkish manufacturers with production facilities in multiple countries (including EU member states) need to understand the local employment, environmental, and regulatory transfer requirements that apply in each jurisdiction
• JV governance in cross-border structures — Minority and majority joint venture positions in cross-border consumer goods transactions require careful governance drafting; Turkish parties should pay particular attention to deadlock resolution, exit mechanics, and the interaction between JV governance and brand license termination rights

This post is part of ULF New York’s M&A monitoring series, tracking significant transactions across U.S. and Turkish-American cross-border practice areas. It does not constitute legal advice.