Kimberly-Clark announced Monday it’s struck an agreement to buy Kenvue in a deal valued at $48.7 billion that would create a consumer staples giant.

The deal is a combination of cash and stock and totals about $40 billion on an equity basis, excluding the impact of debt. Shares of Kenvue surged 15% Monday, while Kimberly-Clark stock fell 13%.

The combined company would bring together brands like Huggies and Kleenex with the likes of Band-Aid and Tylenol. It would include 10 billion-dollar brands, the companies said in a news release. The acquisition would be one of the largest on Wall Street this year.

The transaction is expected to close in the second half of 2026.

Kimberly-Clark Chairman and CEO Mike Hsu said in a statement that the companies share a “commitment to developing science and technology to provide extraordinary care.”

“Over the last several years, Kimberly-Clark has undertaken a significant transformation to pivot our portfolio to higher-growth, higher-margin businesses while rewiring our organization to work smarter and faster,” Hsu said. “We have built the foundation and this transaction is a powerful next step in our journey.”

Kenvue, a portfolio of consumer health brands, spun out of Johnson & Johnson in May 2023, marking the biggest shake-up in J&J’s nearly 140-year history. Since then, Kenvue shares have fallen almost 35% from their initial public offering price. As of Friday’s close, Kenvue traded at about $14 per share for a market cap of roughly $27 billion.

J&J has sold all of its remaining stake in the consumer goods giant.

The deal comes just weeks after President Donald Trump made unfounded claims linking the use of acetaminophen — the active ingredient in Tylenol — during pregnancy to an increased risk of autism, sending Kenvue’s stock sharply lower. The company has staunchly pushed back against his administration’s accusation, and many medical experts say Tylenol is often the safest and only option for pain and fever relief in pregnant women.

Acetaminophen is used by upward of 100 million Americans annually.

Kenvue Chair Larry Merlo said in a statement that following a comprehensive strategic review, the board is “confident this combination represents the best path forward for our shareholders and all other stakeholders.”

Three Kenvue board members will join the Kimberly-Clark board upon the deal’s closing. Hsu will continue to serve as chairman and CEO.

The combined company would generate estimated 2025 annual net revenue of roughly $32 billion and adjusted earnings before interest, taxes, depreciation and amortization of approximately $7 billion, according to the release.

Kimberly-Clark and Kenvue expect about $1.9 billion in cost synergies from the transaction to be realized in the first three years following the deal’s close.

The acquisition comes as Kimberly-Clark and the broader consumer packaged goods industry try to address shifting demand and shopping behavior, often through deal-making and divestitures.

Tariffs imposed by Trump’s administration have challenged the industry and its profits as key commodities like pulp, which is used to make tissues and diapers, grow more expensive.

At the beginning of 2025, Kimberly-Clark stopped making private-label diapers for Costco to focus on more premium brands that command higher margins.

In June, the company sold a majority stake in its international tissue business to Brazilian pulp maker Suzano. The resulting joint venture is intended to shield Kimberly-Clark from volatile input costs and help stabilize its margins.

Once the deal closes, Kimberly-Clark will own health-care brands like Sudafed and Pepcid, once again pitting the company against rival Procter & Gamble, which has a health-care division that includes Pepto-Bismol and Vicks.

But even with Kimberly-Clark’s blockbuster acquisition, P&G still dwarfs its rival in both enterprise value and annual revenue. P&G has a market cap of about $350 billion.

Similar to Kenvue, other spinoffs have also recently proven to be popular acquisition targets. Last year, candy maker Mars announced plans to buy Kellanova, a snacking-centric spinoff of Kellogg, while Ferrero bought W.K. Kellogg, the cereal stand-alone, this year.