Kimberly-Clark has entered into an agreement to acquire nappy maker Softex Indonesia for $1.2bn in cash as part of a drive to boost its presence in the lucrative South East Asia market.

The US firm is buying Softex from a group of shareholders that includes CVC Capital Partners.

“This acquisition represents a compelling strategic fit and demonstrates our commitment to accelerate growth in developing and emerging markets,” said Mike Hsu, Chairman and CEO, Kimberly-Clark.

“Moreover, adding Softex Indonesia and its brands to Kimberly-Clark will enhance our company’s underlying growth prospects and help us create even more long-term shareholder value.”

The nappy market in Indonesia is currently worth an estimated at $1.6bn, the sixth-largest in the world. Softex Indonesia generated net revenues of around $420m in 2019 with 80% of its sales coming from nappies. It currently holds the number two market share position with its Sweety and Happy Nappy brands. The remaining Softex Indonesia sales are mostly in the feminine care and adult care categories.

Kimberly-Clark owns several leading nappy brands including Huggies, GoodNites, and Pull-Ups.

The deal is expected to close early in the fourth quarter of 2020.