Softys, a subsidiary of Chilean tissue group CMPC, has acquied family-owned Brazilian tissue and diaper producer Sepac, for 1.3 billion reais ($330 million), creating the largest company in the segment in the country.

Sepac was founded in 1974 and owns brands such as Duetto, Paloma, Stylus and Maxim. The company has an annual production capacity of 135,000 tons of tissue paper on 6 paper machines in a mill in the state of Paraná, the company also produces 175 million diapers per year on one diaper conversion line.

"The merger of the two companies will consolidate Softys as the largest operator of the tissue industry in Brazil, highlighting Sepac's presence in the south of the country that is complemented by Softys' current relevance in the central states," CMPC said in a statement.

"This is an operation consistent with our goal to grow in markets with high development potential for the tissue business, such as Brazil," said CMPC Group Chairman Francisco Ruiz-Tagle in the statement.

Softys has been in Brazil since 2009 and has operations in São Paulo, with a capacity to produce 145,000 tons of tissue paper hat will rise to 280,000tpy after the merger with SEPAC.