Kimberly-Clark Corp. is selling investment-grade bonds in as many as five parts to help fund its pending acquisition of Tylenol maker Kenvue Inc. The consumer-goods company is offering notes with maturities of two to 10 years, according to a person with knowledge of the matter. Initial price discussions for the longest tenor involve a premium of about one percentage point above Treasuries. Kimberly-Clark held investor calls on Friday, amid a turbulent period for markets.
Numerous companies held off on bringing high-grade bond sales last week as Treasury yields swung sharply on stronger-than-expected inflation data and worries about the artificial-intelligence trade. The Kleenex maker’s third-quarter report is due on Nov. 5. Companies typically don’t issue bonds in the roughly two-week period before disclosing results.
JPMorgan Chase & Co. provided $7.7 billion in bridge financing late last year to help fund the acquisition. The bond sale is expected to replace that temporary borrowing facility. Other banks managing the bond sale are Citigroup Inc. and Morgan Stanley.
The largely-stock acquisition, expected to close by the end of the year, is currently valued at about $36 billion. Compensation is set to include $6.7 billion of cash that would in part come from new debt sales. Kimberly-Clark has previously said the deal would create a company with $32 billion in revenue and allow it to surpass Unilever Plc to become the second-biggest seller of health and wellness products after Procter & Gamble Co.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing