Kimberly-Clark has licensed two of its Kleenex tissue brands to a Swedish paper manufacturer to satisfy European Commission competition rules.
The tissue maker yesterday (Tuesday) announced its decision to license the Kleenex toilet tissue brand and kitchen towel to Svenska Cellulosa Aktiebolaget (SCA) for the next ten years. The company was required to divest itself of the brands in order to satisfy European Commission competition rules after it merged with Scott Paper in January.
As part of the agreement, Kimberly-Clark bought the Peaudouce brand from SCA in France.
Although Procter & Gamble had been widely tipped as a possible buyer for Kleenex toilet and kitchen towels, City sources say Kimberly-Clark chose the company least likely to threaten its existing tissue brands. P&G’s distribution channels and marketing expertise when placed behind the Kleenex toilet tissue and kitchen brands would have posed a threat to Andrex and Kleenex facial tissues.
One source says the agreement is a dream for both companies involved. SCA has sold a brand, Peaudouce, that has failed to make any mark in the French nappy market despite investment. Kimberly-Clark, by buying that brand, increases its market share of the nappy market from 13 per cent to 30 per cent by value.
Peaudouce will enable Kimberly- Clark to take on P&G’s dominance of the nappy market in France where it is market leader with Pampers and a 51 per cent share of the market by value (IRI Secodip).