Ken Paxton to court: Block Kenvue dividend; Texas says payout risky amid Tylenol case
Texas Attorney General Ken Paxton has asked a state court to block Kenvue from paying a $398 million dividend, citing financial risks from lawsuits over Tylenol’s safety during pregnancy. The case also threatens Kenvue’s $40 billion merger with Kimberly-Clark. Medical experts maintain that Tylenol, when used correctly, remains safe for pregnant women.
Paxton moves to stop Kenvue’s dividend
Texas Attorney General Ken Paxton has filed a case to block Kenvue from paying a shareholder dividend scheduled for November 26. He said the company is under financial stress because of many lawsuits and should not move large amounts of money while these cases continue. The dividend, worth about $398 million, could break Texas law against fraudulent transfers. Such laws prevent companies from paying out money if they are at risk of being unable to pay debts or damages. “Kenvue very well may be insolvent because of its own reckless actions,” Paxton said.
The lawsuit targets Kenvue and Johnson & Johnson, its former parent company. It claims that they failed to warn consumers about possible risks of using Tylenol during pregnancy. The claim that Tylenol could cause autism in children has been widely shared online but is not supported by strong scientific proof.
Medical experts defend Tylenol
Doctors and medical groups continue to say that acetaminophen, the active ingredient in Tylenol, is safe to use during pregnancy when taken as directed. It remains the most recommended medicine for pain and fever for pregnant women. Kenvue, which is based in Summit, New Jersey, has said that its products meet safety and health standards. Johnson & Johnson has not commented on the latest lawsuit.
Merger deal faces uncertainty
Paxton’s move adds pressure to Kenvue’s planned $40 billion merger with consumer goods giant Kimberly-Clark, which makes brands like Kleenex and Huggies. The deal was announced earlier this week and would help Kimberly-Clark enter more profitable product areas like skincare and pain relief. However, investors have shown concern. Kimberly-Clark’s shares dropped nearly 15% after the merger announcement, and Kenvue’s stock is now trading 23% below the proposed takeover price. Many investors worry that Kenvue’s legal problems could make the merger risky or delay it. Kimberly-Clark is not part of the lawsuit and has not made any public comment.
Political and legal background
The lawsuit was filed in Panola County, Texas, a district that strongly supports President Donald Trump. Paxton, a Republican and Trump ally, is expected to run for the US Senate in 2026. Trump recently repeated unproven claims linking Tylenol use during pregnancy to autism, which added new attention to the issue. Despite the controversy, medical experts continue to reject any solid link between acetaminophen and such risks.