Kimberly-Clark completes acquisition of Kenvue for shares and $3.50 cash

Kimberly-Clark completed its acquisition of Kenvue (KVUE), a regulatory filing showed on Nov. 2. Each Kenvue share was converted into 0.14625 Kimberly-Clark shares plus $3.50 in cash.

Fractional shares will be settled in cash, based on the average volume-weighted price of Kimberly-Clark stock over the five trading days ending before the closing date. The consideration is paid without interest.

Kimberly-Clark funded the cash portion with cash on hand, debt financing and proceeds from the previously announced sale of a 51% interest in its International Family Care and Professional business.

Kenvue notified the New York Stock Exchange that the merger was complete. It asked the exchange to suspend trading in its common stock before the open on the closing date.

The delisting takes effect 10 days after the exchange files a Form 25 with the SEC. Kenvue's surviving entity then intends to deregister the shares and suspend its reporting obligations.

Kenvue's equity awards converted into equivalent Kimberly-Clark awards, including vesting terms. Performance stock units became time-vesting restricted stock units, measured at the greater of target and actual performance through the closing.

Kenvue repaid in full and terminated its five-year senior unsecured revolving credit facility, which carried $4.0 billion of commitments in U.S. dollars and euros. No borrowings were outstanding at closing.

Kenvue also terminated its Long-Term Incentive Plan and its Deferred Fee Plan for Directors, effective at closing.

All of Kenvue's directors resigned at the first effective time. Courtney Roane and Flavio Costa, who had been directors of the merger subsidiary, became directors of the initial surviving company.

The surviving company, renamed Kenvue LLC, assumed Kenvue's obligations under its indenture and seven series of senior notes. They are the 5.050% notes due 2028 ($1.00 billion), the 5.000% notes due 2030 ($1.00 billion), the 4.850% notes due 2032 ($750 million), the 4.900% notes due 2033 ($1.25 billion), the 5.100% notes due 2043 ($750 million), the 5.050% notes due 2053 ($1.50 billion) and the 5.200% notes due 2063 ($750 million).

Kenvue's General Counsel, Matthew Orlando, received an agreement dated Nov. 1 covering a federal excise tax on certain change-of-control payments. Under it, he would receive an additional payment to leave him in the same after-tax position, capped at $8 million.

The company said it made the arrangement because of Orlando's work over the prior year to negotiate and complete the mergers.