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Kleenex maker Kimberly-Clark to spin off its health care business

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(Globalpost/GlobalPost)

Kimberly-Clark Corp., which makes Kleenex tissues and Huggies diapers, said on Thursday that it plans to spin off its health care business into a separate publicly traded company. Kimberly-Clark's stock jumped 5 per cent in after-hours trading following the announcement Thursday.

The health care business, which makes medical devices and surgical products, has about $1.6 billion in annual sales. The spinoff is expected to be completed at the end of the third quarter of 2014 and is subject to market, regulatory and other conditions. Kimberly-Clark is working with Morgan Stanley on the deal.

Robert Abernathy, who is president of Kimberly-Clark's Europe group, will become CEO of the new health care company. Abernathy has worked at Dallas-based Kimberly-Clark since 1982.

"While K-C Health Care has been part of our company since the 1970's, its strategic fit and growth priorities have changed over time and we now think that pursuing a spin-off makes sense for our shareholders," said Kimberly-Clark CEO and Chairman Thomas Falk.

The health care business is based in Roswell, Ga., and has more than 16,000 employees around the world.

Shares of Kimberly-Clark rose $5.79 to $115.50 in after-hours trading Thursday. They were up 87 cents to close at $109.71 during regular trading hours.

http://www.globalpost.com/dispatch/news/the-canadian-press/131114/kleenex-maker-kimberly-clark-spin-its-health-care-business