Kimberly-Clark to Sell Prudhoe Mill to Sweden's SCA and to Purchase Peaudouce Brand from SCA's Molnlycke Subsidiary; Mill Sale Will Complete Required Merger-Related Divestitures Acquisition of Peaudouce Brand Will Make K-C No. 2 Diaper Company in Europe

Business Wire, August 27, 1996

DALLAS--(BUSINESS WIRE)--Aug. 27, 1996--Kimberly-Clark Corporation today announced it has agreed to sell its tissue mill at Prudhoe, Northumberland, England, and certain consumer tissue businesses in the United Kingdom and Ireland to a unit of Svenska Cellulosa Aktiebolaget SCA of Sweden. Separately, Kimberly-Clark is purchasing the Peaudouce diaper brand in France from SCA's subsidiary, Molnlycke AB. Financial terms of the transactions were not disclosed.

The European Commission required the divestiture of the Prudhoe mill as a condition for approval last January of the merger of Kimberly-Clark's and Scott Paper Company's operations in Europe. Likewise, the United States Justice Department required the sale of certain assets in the United States, all of which Kimberly-Clark has already sold or reached agreement to sell.

"We are receiving good value for the facility and related tissue businesses and are pleased to have all United States and European regulatory issues behind us," said John A. Van Steenberg, president of Kimberly-Clark Europe. "Now we will focus our efforts in the United Kingdom on growing our strong tissue businesses -- Kleenex facial tissue and Andrex bathroom tissue and kitchen towels.

"The purchase of the Peaudouce brand will be a key strategic acquisition for Kimberly-Clark, making us the No. 2 diaper company in Europe," Van Steenberg said. "The Peaudouce brand has a strong heritage in France, which we will continue to support. The brand complements our growing Huggies diaper business and provides an even stronger base for our European diaper expansion."

Market share for Huggies diapers in France has more than doubled to 13 percent in 1996. Peaudouce diapers, with annual manufacturer sales of more than US$90 million in France, will increase Kimberly-Clark's share of the French diaper market to about 30 percent.

As part of the purchase, the companies have settled existing litigation in Europe, and Molnlycke has granted licenses to Kimberly-Clark under certain European diaper patents. The transaction also includes a supply contract for Kimberly-Clark to purchase diapers from Molnlycke's French mill at Linselles.

Regarding the merger-related divestitures, Kimberly-Clark will grant SCA a license to use the Kleenex brand name for up to 10 years on consumer bathroom tissue and kitchen towels in the United Kingdom and Ireland. The agreement also includes a perpetually renewable license for Scotties facial tissue in the United Kingdom and Ireland, as well as ownership of the Handy Andies trademark. Annual revenues for these consumer tissue products are forecasted to be approximately US$130 million. Neither the sale of the Prudhoe mill nor the license of the Kleenex brand name has any effect on Kimberly-Clark's existing Away-From-Home business for institutional markets.

Kimberly-Clark said the transactions are expected to close in September after completion of consultation with affected employee works councils and notification to French regulatory authorities. The company will use the proceeds from the sale of the Prudhoe mill to purchase the Peaudouce brand, reduce debt and repurchase shares of its common stock. As previously announced, Kimberly-Clark expects total proceeds of $500 million to $600 million from asset sales in 1996.

Kimberly-Clark is a leading tissue and personal care products manufacturer. The company is the European market leader in both away- from-home and consumer tissue products with such well-known brands as Kleenex, Scottex and Andrex. Its personal care products include Huggies diapers, Kotex feminine care pads, Pull-Ups training pants and Depend incontinence care products. In 1995, European sales of consumer products accounted for $2.7 billion of Kimberly-Clark's more than $13 billion in revenues.

CONTACT: Tina Barry, 214/281-1484 (U.S.)

or Sarah Portway,44-1737-736214 (U.K.)

OR

Investor Relations: Mike Masseth, 214/281-1478

All of Kimberly-Clark Corporation.