Alright, let's get this straight. Kimberly-Clark, the folks behind toilet paper and tissues, are buying Kenvue, the Tylenol people, for almost $50 billion? What in the actual hell is going on? Sounds like two drowning companies clinging to each other in a vain attempt to stay afloat.
Band-Aids on a Bullet Wound
So, Kenvue got spun off from Johnson & Johnson just two years ago. Two years! And already they're getting swallowed up? That tells you everything you need to know, doesn't it? Wall Street apparently saw this coming. Shares down 50% since last spring? Ouch. Morningstar's analyst says it's "poor execution" and "lack of experience." Translation: they screwed up, plain and simple.
And Kimberly-Clark? Their stock tanked 15% on the news. The market's screaming, "bad idea!" I mean, are they really thinking slapping Listerine next to Cottonelle is some kind of game-changer? Please.
They're talking about $1.9 billion in "cost savings." Code for massive layoffs, offcourse. Expect a bloodbath of middle management types and redundant marketing staff. The little guy always gets screwed.
The Generic Apocalypse is Upon Us
The real kicker here is the rise of store brands. Did you catch that little nugget? Over half of all toilet paper sold is now generic. HALF! People are wising up. Why pay a premium for a name brand when the store brand does the same job for a fraction of the price?
It's like paying $500 for designer jeans when you can get a perfectly good pair at Target for $30. Actually, scratch that. I wouldn't be caught dead in designer jeans anyway. Give me a pair of Wranglers and a six-pack, and I'm good to go.
Kenvue and Tylenol have also been dragged into the Trump/RFK Jr. autism conspiracy nonsense. Seriously? Is this what we're dealing with?
And Kimberly-Clark thinks they can fix this mess?
I'm sorry, but I'm not buying it. This whole thing smacks of desperation. It's like watching two old boxers, past their prime, clinging to each other in the ring, hoping to make it to the final bell.
History Doesn't Lie
And let's not forget the graveyard of failed mergers in the consumer packaged goods sector. Kraft Heinz, anyone? Remember that disaster? Net revenue down every year since 2020. These mergers rarely work. The corporate synergies they promise never materialize. It's always the same story: bloated bureaucracy, infighting, and ultimately, failure.
Citi Investment Research analyst Filippo Falorni is worried about the deal’s size. Yeah, no kidding.
They're blaming inflation, saying people are buying cheaper brands because they're broke. Well, duh! Maybe if these companies weren't so busy lining their executives' pockets, they could offer their products at a reasonable price. Then again, maybe I'm the crazy one here...
