Kimberly-Clark, the global personal care products maker and majority shareholder of Yuhan-Kimberly, is preparing to divest its South Korean tissue business in a carve-out sale, according to people familiar with the matter. The division, known for its Kleenex brand, has operated for more than five decades and has attracted interest from major private equity firms and strategic investors.
The company is considering the sale of core assets in Yuhan-Kimberly’s tissue operations, including its Gimcheon plant, as part of plans to exit the segment in South Korea, investment banking sources said. The plant spans about 64,000 square feet and has production capacity of roughly 36,000 metric tons annually.
Kimberly-Clark has reportedly hired a major domestic accounting firm to assist with the sale process and has begun reaching out to potential bidders. Prospective buyers have received investment memorandums and are reviewing the opportunity. Details such as the size of the stake to be sold and brand licensing rights will be negotiated later.
Brands including Kleenex, Scott, and BbyB are expected to remain in use under a licensing agreement, with the new owner paying royalties. Yuhan-Kimberly currently pays Kimberly-Clark more than $30 million annually in technology and brand fees.
Kimberly-Clark entered the Korean market in 1970 through a joint venture with local pharmaceutical company Yuhan Corp., initially with a 60-40 ownership split. In 1998, Yuhan sold 10% of its stake to Kimberly-Clark, resulting in the current structure of 70% Kimberly-Clark and 30% Yuhan.
Yuhan-Kimberly operates five facilities in South Korea, including its headquarters in Seoul, a research center, and plants in Daejeon, Chungju, and Gimcheon. Industry analysts say the exit was widely expected, as Kimberly-Clark has been scaling back tissue operations outside North America in recent years.
The tissue business remains highly profitable, with average EBITDA margins of about 17% from 2021 through 2023, thanks to the stable demand for paper products. Alongside private equity firms, other domestic paper product makers are expected to consider bids. Major competitors include Daio Paper’s Clean & Clean and Monalisa, which hold market shares of about 15% and 10%, respectively, compared to Yuhan-Kimberly’s 30%.
For industry players, the deal represents a rare opportunity to acquire the market leader. Private equity bidders are also expected to explore bolt-on strategies or form consortiums with strategic investors to strengthen their bids.
