Kimberly-Clark Shares Plunge 16.77% as Texas Lawsuit Threatens Kenvue Merger

The share price dropped to a record low today, with an intraday decline of 1.41%. Kimberly-Clark (KMB) shares have now fallen for four consecutive days, shedding 16.77% over the period, amid growing uncertainty surrounding its proposed $40 billion acquisition of Kenvue, a former Johnson & Johnson subsidiary.

The decline follows a Texas Attorney General lawsuit targeting Kenvue, which seeks to block a $398 million shareholder dividend scheduled for November 26. The suit alleges Kenvue and J&J concealed health risks tied to Tylenol and talc-based products, labeling the payout a “fraudulent transfer” under state law. The legal challenge has raised doubts about Kenvue’s solvency, complicating the merger’s viability. KMB’s shares initially fell 15% on the merger announcement, reflecting investor concerns over prolonged litigation risks and potential liabilities.

Market sentiment remains fragile as Kenvue’s stock has traded nearly 23% below the takeover price since the deal was announced. The Texas AG’s aggressive legal tactics, including filing in a Trump-leaning county, have amplified regulatory risks for KMB. Analysts note the merger’s strategic rationale—access to high-margin OTC and skincare brands—is overshadowed by litigation costs and governance scrutiny. KMB must now navigate a dual challenge: managing Kenvue’s legal exposure while maintaining confidence in its core tissue and personal care markets. The outcome of the lawsuit and broader litigation landscape will likely determine the merger’s fate and KMB’s equity trajectory in the coming months.