** Kimberly-Clark KMB.O is laying down $40 billion to buy Kenvue KVUE.N in a massive deal that has puzzled some investors as the Tylenol maker struggles with weak sales, lawsuits and White House attacks linking its painkiller to autism

** The deal is expected to close in the second half of 2026, after which Kimberly-Clark's CEO Mike Hsu will take over as the top boss and chairman of the combined company

DEAL SYNERGY SIGNIFICANT

** RBC Capital Markets says the Tylenol litigation poses risks to the deal but notes the relationship between acetaminophen and autism has not been established according to the U.S. FDA

** Canaccord Genuity says the acquisition will potentially help KMB expand into the consumer self-care category, which is expected to grow steadily over the long-term

** Jefferies says the outcome of key legal cases could decide if the deal reaches completion or brings another bidder comes to the table

** Deutsche Bank says while surprising, the deal is not without "strategic logic" as it offers KMB a substantial platform and enhanced scale in complementary markets and categories expected to grow going forward

** Morgan Stanley says the deal's synergy potential is significant; adds "KVUE offers a solid, underutilized brand portfolio that KMB may be able to reinvigorate"

(Reporting by Kanchana Chakravarty in Bengaluru)

((Kanchana.Chakravarty@thomsonreuters.com))