Tylenol may not cause autism, but it has sparked an intriguing investment opportunity. President Trump’s warning about acetaminophen, the active ingredient in Tylenol, inadvertently drew attention to Kimberly-Clark Corp., a Texas-based company with an attractive dividend, a beaten-down share price, and a rising profile at the White House. The company’s bold move to acquire Kenvue Inc., the maker of Tylenol, for $48.7 billion, has created a stir in the market. This acquisition is significant for several reasons. Firstly, it comes at a time when investors are cautious about mergers among slow-growing consumer staples, especially those that create unwieldy conglomerates. Secondly, Kimberly-Clark will inherit any legal complications that arise from Trump’s warnings, as Texas has already sued Kenvue for allegedly hiding risks associated with Tylenol use during pregnancy. The immediate market reaction shows investors’ wariness, with Kimberly-Clark’s share price dropping 14.6% after the announcement, pushing the dividend yield above 5%. However, Kimberly-Clark’s timing appears shrewd, as Kenvue’s share price was already near a record low, down over 40% since May. Kenvue, spun out by Johnson & Johnson in 2023, has struggled independently, lagging behind its parent company by 55 percentage points this year. Trump’s warnings about acetaminophen, despite lacking compelling medical evidence, partly explain Kenvue’s performance. Kenvue’s recent quarterly results showed a decline in sales and profit margin, indicating ongoing challenges. However, if Kimberly-Clark can successfully integrate Kenvue, cut costs, and expand margins, Kenvue’s value is expected to rise, with management predicting $1.9 billion in savings within three years. The acquisition also brings attractive health and wellness brands, such as Listerine, Band-Aid, Benadryl, and Aveeno, which can command higher profit margins and grow more valuable with an aging population. For Canadian investors, Kimberly-Clark offers diversification beyond traditional sectors, making it relatively immune to economic downturns. While Tylenol may not be the ideal diversification at the moment, due to the ongoing uncertainty around the White House’s claims, Kimberly-Clark’s decision to acquire Kenvue was made after thorough expert consultations. The company believes the opportunity outweighs the risks, and science may ultimately prevail, lifting the negative headlines and rewarding contrarian investors.