WSJ What’s News - What Drove Kimberly-Clark’s $40 Billion Deal for Tylenol Maker Kenvue

Episode Date: November 3, 2025

P.M. Edition for Nov. 3. In one of the biggest takeovers of the year, Kimberly-Clark has agreed to buy Tylenol maker Kenvue for more than $40 billion. WSJ business reporter Natasha Khan joins to discuss the strategy behind the deal. Plus, Chipotle has invested heavily in courting younger customers. Now, they’re feeling the economic pinch—and so is Chipotle. Journal reporter Heather Haddon talks about what the company is doing about it. And Mali may soon be the first country to fall to al Qaeda. We hear from WSJ security correspondent Benoit Faucon on what that would mean for the U.S.-designated terrorist group’s presence in Africa. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Plus, young Americans are feeling the economic pinch, and that's hitting Chipotle. And three key races in tomorrow's election will gauge voters' frustration with the economy. Democrats are really unifying around the theme of affordability. They're saying we're the ones who have the plan to lower cost for people. It's Monday, November 3rd. I'm Alex O'Sullough for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. In one of the biggest takeovers of the year, Kimberly Clark has agreed to buy Tylenol maker Kenview for more than $40 billion.

The cash-and-stock deal would create a company with $32 billion in annual revenue, whose brands include household staples like huggies, Kleenex, cottonell toilet paper, and listerine mouthwash, of course, Tylenol. WSJ business reporter Natasha Khan tells us what Kimberly Clark gets out of the deal. One of the things that is really interesting about this deal is that Kenview operates in this sort lucrative area in consumer health care. It's not pharmaceuticals, but it's over-the-counter medicines, it's wellness. Kimberly Clark has said they see a lot more growth opportunities in the consumer health space. Kimberly Clark has lagged behind rivals Unileverly and Procter and Gamble. And Kenview's popular health and wellness products could give it a stronger

foothold in the consumer health care market. Their messaging is really on the synergies that can be found in the deal. For example, people buying Huggy's diapers could then now also buy Johnson's baby wash or avino baby cream. But shares of Kenview, which spun off from Johnson and Johnson in 23 have been under stress since President Trump said in September that acetamedophon, the active ingredient in Tylenol, is a potential cause of autism. So taking Tylenol is not good. I'll say it. It's not good. Then, last week, there was a high-profile lawsuit against the company. Texas is suing the makers of Tylenol over an unproven link to autism.

The Republican Attorney General of Texas claims that the companies hid risks that the a drug post to the brain development of children. Natasha said executives talking about the deal with investors and analysts this morning didn't really get into that. There were questions that were raised about the risk associated with this ongoing issue with Tylenol, but it was not really addressed. Kenvue has said the accusations that Tylenol is linked to autism are baseless, and both scientists and medical groups say President Trump's claims are unfounded.

Trading on the deal news today, Kenvue's shares Rose-Barrows. more than 12%, while Kimberly Clark's stock slid 14.6%. In broader markets, stocks were mixed after a record-setting October. The Dow dropped half a percent, while the S&P 500 edged higher, and the NASDAQ gained roughly half a percent. And in two updates from Washington, the federal government said today that it will pay some snap food benefits for the month of November. A federal judge in Rhode Island last week ordered the government to use emergency funds to keep SNAP going during the government shutdown. The government today says there is about $4.7 billion in emergency funding, enough to

cover about half of monthly payments for eligible households. Snap benefits typically total about $8 billion a month for approximately 42 million people. The program formerly known as food stamps helps poor and disabled people buy food. The government is warning that there could also be delayed payments in some states. And we're exclusively reporting that hundreds of travel businesses are asking Congress to end the government shutdown by immediately passing a straightforward spending bill. The casinos, hotels, and convention bureaus said in a letter to congressional leaders that they're worried about the holiday travel season. Since the shutdown more than a month ago, government employees like air traffic controllers have gone without pay,

leading to delays and safety concerns. The business's letter adds to the pressure on Democratic to give up their drive for a broader deal before voting to reopen the government. Burrito chain Chipotle has spent years cultivating younger customers. It's pitched its burritos and bowls as packed with protein for gym bros and healthy eaters and sponsored video game competitions.

Some dedicated fans even call themselves the Chipotle Boys. Now, though, that bet seems to be unraveling. The company said last week that customer traffic is sliding and cut a key sales forecast. Chipotle CEO Scott Votwright said customers who are 25 to 35 years old are pulling back on visits. That customer age group accounts for roughly a quarter of Chipotle sales. For more, I'm joined now by Heather Haddon, who covers restaurants for the journal. Heather, what's behind this drop-off in numbers?

What's going on here? Yeah, Chipotle was pretty frank about it when they talked about this decline in this key segment, 25 to 35-year-olds. And they said, basically, the economy is. hitting them. They're having to pay student loans again. Their wage growth isn't growing like it once was. It just seems like this is a demographic that's really feeling pinched right now and they're not spending like they were. And is this a decline that is specific to Chipotle or are we seeing it across a number of fast casual restaurants? Yeah, we're going to learn more about that this week when Sweet Green and Kava report. But it seems like in general, this age group is pulling back on

discretionary spending. There's been some other research that shows that restaurants is actually one of the areas that younger consumers think they're going to pull back the most on in the next six months. So restaurants ranked the top in this PWC poll that was just conducted, focused on younger consumers. And that's where they see they can save a bit when they're feeling more cash crunched and more conscious of spending right now. Let's jump back to Chipotle for a second. What is the company doing about this drop-off? So Chipotle definitely is responding. They are upping digital deals really targeted towards younger consumers. So this is like trivia games or other things that you can play through Chipotle to get free food. They also have something called Chipotle You,

which is encouraging university students to post how much Chipotle they eat and kind of compete internally within a university. And they're also just trying to hold off on pricing, I mean, you know, that does not help Chipotle's margins necessarily because their costs are increasing on a number of fronts, but they think it's really important to prove and to show their value. So it sounds like the company is not doing a sort of strategic pivot to court a different demographic. What does this mean for the company's prospects? They're still bullish. They said when they're opening new restaurants in the U.S., they're still seeing great returns. they believe that they can get these consumers back,

but it is going to take investment. And it is something we'll have to see how investors feel about going forward. That was WSJ reporter, Heather Hadden. Thank you, Heather. Thanks. Coming up, the country that might become the first to fall to al-Qaeda. That's after the break. Al-Qaeda militants are moving closer to seizing the capital of the West African nation of Mali,

which, should the city fall, would become the first country in the world run by the U.S. designated terrorist group. WS.J security correspondent Ben-Waw-Foukhan is here to tell us more. Ben-Wah, I think most listeners might associate al-Qaeda with more of the Middle East than with Africa. What is given the organization a foothold there? What does its presence look like? Basically, the epicenter of al-Qaeda, but also of Islamic State, I've moved to Africa. There's several reasons for that. One is obviously the kind of weakened states that were unable to rein in these organizations in ways where because of the kind of much bigger military effort put in the Middle East, it was no longer possible for these two organizations, Al-Qaeda and Islamic State, to maintain foothold in the Middle East.

Focusing in on Mali, what is the situation there? The jihadists have been having a creeping takeover over the country, meaning they started with an insurgency, you know, in 2012, and gradually year after year, one village at a time, they moved from the very north, the Sahara, into the south. And now they are the dostep of the capital. But instead of doing a full-out assault, they decided to do a blockade that effectively deprived urban dwellers or fuel. flower is also becoming rare, and it's not only the citizens, but also the army that is described of fuel resources. So basically paralyzing the central government. Al-Qaeda and Islamics take militants are conducting insurgencies across a lot of West Africa. What would it mean for al-Qaeda and its power if they take over Mali?

It's an organization that doesn't know borders. In fact, it sort of leveraged the fact that these borders are very porous to enable illicit international. national trade, like gold illicit exports to countries like the UAE. So for them, there is no border. And if one country falls, then of course that would emboldened them to make another push in other countries, especially Burkina Faso, which is where they're also very powerful. And then remember, they have a template, the Taliban template. It's an inspiration for this leader of al-Qaeda in Mali.

He actually pledged allegiance to the Taliban and said, this is our motto. This is what we want to do. That was WSJ Security Correspondent, Benoit Foucahn. Thanks, Benoit. Thank you. And finally, tomorrow is Election Day in the U.S. Where voter stand can be an indication for their moods ahead of next year's midterm elections, and also how they're feeling about President Trump's economic policy.

WSJ reporter and editor Aaron Zittner joins me now from Washington. Aaron, what races are you paying attention to? We're looking at the election for mayor in New York City, where Zoran Mamdani has created something of a sensation with his aggressively progressive, freeze the rent, free child care, free fast buses agenda. Races for governor in Virginia and New Jersey. Those are usually big races we look at. They always come one year after a presidential election. So affordability has been a key element in a number of. these races. What are you going to be paying attention to to see how that plays out? And how does that

relate to President Trump's handling of the economy? These elections come in some ways, unexpected moment for Donald Trump. Here's the businessman president. The president who said he would use his business savvy to lower the cost of living for the country. And instead, what we find is that voters are very dissatisfied with his handling of the economy, of tariffs, and especially of inflation. In some polls, the disapproval is 30 points higher than approval on his handling of cost of living and inflation. Democrats are really unifying around the theme of affordability. They're saying we're the ones who have the plan to lower cost for people, whether it's

Zura and Mamdani, who would tax the wealthy and raise the corporate income tax in New York to fund his proposals, or whether it's a more centrist proposal, like, say, what we're seeing from Abigail Spanberger, the Democrat in. Virginia, who's going after things like the middlemen in the pharmaceutical supply chain to lower pharmaceutical costs. Let's ease permitting and zoning restrictions for allowing certain kinds of housing to be built to make housing more affordable, a more centrist agenda. And so what are you going to be watching in those three races in particular tomorrow? The big elections in 2026 are the Democrats' chance to really check the power of Donald Trump

if they can pick up more House and Senate seats. And what we'll be looking for on Tuesday is what can we see now in the enthusiasm of each party to vote? That was WSJ reporter and editor, Aaron Zittner. Thanks so much, Aaron. Good to be with you. And that's what's news for this Monday afternoon. Today's show is produced by Pierre Bienname, with supervising producer Tali Arbell. I'm Alex Ocelo for the Wall Street Journal.

We'll be back with a new show tomorrow morning. Thanks for listening. I'm going to be you know,