[BENGALURU] Kimberly-Clark Corp said on Thursday it would buy diaper maker Softex Indonesia for US$1.2 billion in cash from a group of shareholders that includes CVC Capital Partners Asia Pacific, as it looks to boost its presence in South-east Asia.
The company, which makes Cottonelle toilet paper, Kleenex facial tissue and Huggies diapers, said Softex would help expand its market share in Indonesia, where demand for disposable diapers has swelled in recent years due to a growing middle class.
The diaper market in Indonesia is currently estimated at US$1.6 billion, the sixth largest in the world, Kimberly-Clark said.
About 80 per cent of Softex's US$420 million in annual sales comes from diapers, while the rest comprises feminine and adult care products.
Kimberly-Clark has seen sales surge in the United States due to a boom in demand for tissues during the Covid-19 pandemic.
It said the acquisition would not have a major impact on its 2020 and 2021 adjusted earnings per share.
The buyout will be financed through debt and cash on hand.
Morgan Stanley & Co and Centerview Partners acted as financial advisers, and Gibson Dunn and Crutcher acted as legal counsel to Kimberly-Clark on the deal that is expected to close in the fourth quarter of this year.