In deciding to buy the company behind Tylenol, the consumer products giant Kimberly-Clark is betting that the product can withstand an extraordinary attack from President Trump and his administration.
Top officials have singled out Tylenol, making unproven claims that the use of acetaminophen products during pregnancy can cause autism.
The Trump administration’s allegations have helped prompt Texas to sue Kenvue, the maker of Tylenol, last week, the first such lawsuit by a state. They could potentially breathe new life into lawsuits filed by hundreds of plaintiffs in state and federal courts by families who claim their children developed neurodevelopmental disorders including autism and A.D.H.D. after acetaminophen use during pregnancy.
The furor has created a public-relations and financial nightmare for Kenvue, a two-year-old spinoff that absorbed Johnson & Johnson’s consumer heath brands. In addition to Tylenol, Kenvue sells other well-known products including Band-Aid, Listerine, Neutrogena and Johnson’s Baby Shampoo.
In July, Kenvue said it was reviewing its strategy to improve its financial performance. Talks with Kimberly-Clark and other prospective suitors began after that, three people familiar with the negotiations said. Kimberly-Clark had long been interested in Kenvue’s business, given the prestige of brands like Band-Aid, the overlap in target customers and the potential to streamline costs, two of the people said.
The deal, for $40 billion, was also a bet that the market had overreacted to the risk of more scrutiny from Washington, one of the people said. Amid the uproar about Tylenol and autism, Kenvue’s stock fell 30 percent over the past eight weeks, perhaps making the acquisition more attractive for Kimberly-Clark. The turmoil helped Kimberly-Clark push for a deal that valued Kenvue at a discount to its peers.
Kenvue’s stock rebounded slightly on Monday after news of the acquisition.
It was not immediately clear exactly how the liability in the Tylenol lawsuits will be addressed under the Kimberly-Clark acquisition agreement. Not all of the details were made public, although a typical scenario would be for Kimberly-Clark to inherit responsibility for the litigation.
The plaintiffs’ lawsuits would certainly carry more weight with the Food and Drug Administration’s decision to seek a warning on the Tylenol label about the connection to neurodevelopmental disorders. An official government warning could depress sales, and Kenvue said it would oppose the labeling changes.
Kenvue has repeatedly rejected Mr. Trump’s claims and defended Tylenol’s safety. The company has emphasized the consensus of mainstream medical groups. They have concluded that acetaminophen is the only pain reliever safe for use during pregnancy to treat high fevers, which can pose a danger to the health of the baby and the mother.
The Kimberly-Clark acquisition stands to give the company more resources to combat litigation and the Trump administration’s actions.
In a joint statement with Kenvue on Monday, Kimberly-Clark said that in evaluating the acquisition, it “carefully considered all risks and opportunities, working with some of the world’s foremost scientific, regulatory, legal and other experts.”
Kimberly-Clark’s stock was down about 14 percent on Monday afternoon, dropping to its lowest level since 2018. Kenvue’s stock was up about 14 percent.
Scientists have long studied a potential connection between acetaminophen and neurodevelopmental disorders like autism, but research has so far has been inconclusive.
Some members of the autism community and supporters of Robert F. Kennedy Jr., now the nation’s health secretary, have claimed for years that acetaminophen use during pregnancy can cause neurodevelopmental disorders.
The Tylenol-autism lawsuits picked up steam in 2022, but they generated little attention at the time. In August, researchers at Harvard, the Icahn School of Medicine at Mount Sinai and other universities published a scientific review that examined 46 existing studies. They found there was evidence, albeit inconclusive in showing a causal link, of a connection between acetaminophen use during pregnancy and neurodevelopmental disorders.
The issue gained wider attention in early September, when the right-wing provocateur Laura Loomer posted on social media about the issue and the The Wall Street Journal reported the Trump administration’s plans to link Tylenol use during pregnancy to autism.
Later that month, Mr. Trump’s startling warning during a news briefing thrust the issue into the public consciousness.
Tylenol is the best known among some 600 products containing the active ingredient acetaminophen, an analgesic.
Kenvue’s revenue from Tylenol is not publicly disclosed. But even with generic competition, the product generated roughly $1 billion in annual sales for the company, according to an estimate from Morningstar, a financial services firm. That is only a small percentage of Kenvue’s $15.5 billion in revenue last year. Tens of millions of Americans take Tylenol every year, and use by pregnant women represents a mere fraction.
“I don’t think Kimberly is buying Kenvue because of Tylenol,” said Keonhee Kim, a Morningstar analyst. “It’s the appeal of the overall portfolio, rather than a specific brand.”
Still, he said, “the depressed stock price definitely makes the deal a lot more attractive.”
Other major companies have faced a legal firestorm after acquiring a troubled product. In 2018, Bayer, the giant German chemical and pharmaceutical company, bought Monsanto, the maker of the well-known weedkiller Roundup. Bayer became financially responsible for claims that the herbicide caused cancer, paying billions of dollars to settle thousands of claims.
Rebecca Robbins is a Times reporter covering the pharmaceutical industry. She has been reporting on health and medicine since 2015.
Lauren Hirsch is a Times reporter who covers deals and dealmakers in Wall Street and Washington.
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