Kimberly-Clark plans to split from its healthcare business
On Thursday, Kimberly-Clark Corp issued a statement that it would be spinning off its healthcare division. The maker of Kleenex tissues and Huggies diapers also said that its healthcare division will be known as a separate publicly-traded company.
Kimberly-Clark is a personal care company in the US that produces paper-based products. Aside from Huggies and Kleenex, its other high-profile brands included Kotex feminine hygiene products, Cottonelle, Scott and Andrex toilet paper, KimWipes scientific cleaning wipes and Wypall utility wipes. The company holds a royal warrant, or the prestige of supplying products for the issuer of the warrent, from the the Prince of Wales and Queen Elizabeth II in the United Kingdom.
The announcement made by Kimberly-Clark prompted its shares to jump 5% in after-hours trading. Shares traded were at a USD5.79 premium to USD115.50 per share on Thursday in after-hours trading. During regular trading hours, shares of Kimberly-Clark were traded at a USD0.87 premium and closed at USD109.71 per share.
Kimberly-Clark's healthcare division makes surgical products and medical devices. Sales from this division totaled USD1.6 billion annually. The healthcare division spin-off was expected to be finalized in the third quarter of next year. The transaction would also be subject to regulatory, market or other conditions. Morgan Stanley had been tapped by Kimberly-Clark for assistance on the deal.
The statement of the company also indicated a new president for the new spinned-off entity. Kimberly-Clark Europe group president Robert Abernathy was appointed as the chief executive offer of the healthcare company. Abernathy had been working for the Dallas-based company since 1982.
Kimberly-Clark CEO and Chairman Thomas Falk said, "While K-C Health Care has been part of our company since the 1970's, its strategic fit and growth priorities have changed over time and we now think that pursuing a spin-off makes sense for our shareholders."
Kimberly-Clark's healthcare division is based in Roswell, Georgia. The division has a global staff of over 16,000.