BY Fraser Tennant
In a $1.2bn deal which highlights its commitment to emerging markets, US multinational personal care company Kimberly-Clark Corporation is to acquire diaper maker Softex Indonesia, a leader in the fast-growing Indonesian personal care market.
A large, growing market with attractive future prospects, approximately 80 percent of Softex Indonesia’s sales come from diapers – an estimated at $1.6bn market and the sixth largest in the world. The remaining sales are mostly in the feminine care and adult care categories.
Kimberly-Clark’s all-cash acquisition of Softex immediately improves its currently limited position in the country to one with strong market share in key personal care categories across Southeast Asia's largest economy.
"This acquisition represents a compelling strategic fit and demonstrates our commitment to accelerate growth in developing and emerging markets," said Mike Hsu, chairman and chief executive of 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 acquisition is another demonstration of Kimberly-Clark's commitment to generate improved, sustainable top-line growth and create long-term shareholder value. Moreover, the transaction will be financed primarily through incremental debt and secondarily, cash on hand.
"Softex Indonesia has a strong, growing and profitable business with a portfolio of brands loved by Indonesian consumers," said Aaron Powell, president of Kimberly-Clark's Asia-Pacific consumer business. "This acquisition provides an opportunity for Kimberly-Clark to accelerate our growth in Southeast Asia, and we look forward to combining our strengths in innovation and brand building to expand on Softex Indonesia's continued success."
Since 1976, Softex Indonesia has built a successful personal care business with strong market positions and has consistently delivered double-digit growth. The company has excellent manufacturing capabilities and a strong go-to-market distribution network. Softex Indonesia generated net sales of approximately $420m in 2019.
The transaction is subject to customary closing conditions and expected to close in the fourth quarter of 2020.
News: Kimberly-Clark to buy Indonesian diaper maker Softex for $1.2 billion