• Deal parties have withdrawn filing, yet to refile
• SAMR steps in after Liu Xu’s second complaint
• Infant diaper probe impact unclear

China’s State Administration for Market Regulation (SAMR) has asked US personal care giant Kimberly-Clark to pull and refile its proposed USD 48.7bn acquisition of Kenvue under the normal review track, two sources familiar with the matter said.

The deal parties have already applied to withdraw their original filing from the agency’s simplified procedure, the sources said. Kimberly-Clark has yet to resubmit filing materials but is expected to do so shortly, the first source said.

The deal was initially accepted as a simple case on 7 May by the Shaanxi Administration for Market Regulation (Shaanxi AMR), a local arm of SAMR. It subsequently received two complaints – on 17 May and 12 June – from Liu Xu, a Chinese competition law scholar known for frequently filing antitrust challenges.

In his first complaint, Liu argued the case should be reviewed under the normal procedure, citing potential overlaps in higher-end baby wipes and feminine menstrual hygiene products. He also noted strong brand loyalty among consumers. In his 12 June complaint, Liu pointed to proposed divestments of Kenvue’s feminine hygiene business in Australia and New Zealand as disclosed in filings with New Zealand’s antitrust regulator.

Following the second complaint, SAMR took over the review from the Shaanxi AMR, the first source said, adding that Liu’s submissions were the only complaints received.

SAMR’s substantive focus aligns with that of other jurisdictions, particularly on feminine hygiene products, the second source said. The regulator’s cautious approach may also reflect the fact that the transaction has yet to be cleared in several major jurisdictions, the second source added.

Regulatory reviews remain outstanding in China, EC, New Zealand, Brazil, Colombia, and Chile, according to public records. The deal has been cleared in India and the US.

Infant diaper probe

Meanwhile, SAMR on 22 June launched a joint investigation with three other Chinese ministries into the alleged formamide contamination in infant diapers.

The probe follows an 18 June media report claiming that varying levels of formamide were detected in infant diapers produced by Kimberly-Clark’s Huggies brand and several domestic brands, including “Babycare” and “BIBAbebe”. Huggies said the same day via its official Weibo account that third-party tests had found no formamide in its products, adding that it had initiated independent testing.

SAMR has not so far reached out to the deal parties regarding the probe or issued related questionnaires, the first source said.

The probe could potentially delay SAMR’s conclusion of its review, said an uninvolved legal practitioner who is familiar with SAMR’s merger control approach. In cases involving people’s consumer welfare or livelihood concerns, SAMR is likely to proceed cautiously until the investigation reaches a conclusion, this practitioner said.

Kimberly-Clark and Kenvue did not respond to requests for comment.

SAMR does not comment on ongoing deals.