CAPE TOWN (From the Business Report) -- Mondi Group announced that it has agreed to buy German supplier Ascania from Schloss Neugattersleben Group, a private equity firm, for €54 million.

The international packaging and paper group, which is listed in Johannesburg and London, said Ascania, a producer of non-woven fabrics and composites used in the production of personal care products, supplies Mondi with non-wovens for diaper elastic laminates. The business, which is based in Aschersleben in Germany and employs about 150 people, would be integrated into Mondi's consumer packaging business unit.

Mondi - which is fully integrated across the packaging and paper value chain, from managing forests to developing industrial and consumer packaging solutions - last month reported a 25 percent increase in profits to €313 million for the six months to June.

A statement from the company said Ascania had generated unaudited revenues of €53m in the year to May.

Mondi CE David Hathorn said the acquisition, which is subject to competition clearance and is expected to complete by the fourth quarter of this year, would "enable further growth with innovative products for baby diapers, adult incontinence, femcare and medical applications."