PZ Cussons Offers to Buy Out Minority Shareholders of PZ Cussons Nigeria, Aims to De-List Amid FX Challenges
PZ Cussons, the soap maker, has announced its intention to acquire the remaining 26.73% stake held by minority shareholders in PZ Cussons Nigeria (PZCN). The company seeks to delist PZCN from the Nigerian stock exchange due to the prevailing “foreign exchange challenges” in the country.
PZ Cussons views the acquisition offer as attractive, particularly in light of recent macroeconomic developments and foreign exchange difficulties in Nigeria. The country has been grappling with high inflation, which reached its highest level in nearly two decades in July, standing at 24.08%, primarily driven by the removal of a costly petrol subsidy and currency devaluation.
PZ Cussons, headquartered in Manchester, had previously warned that the devaluation of Nigeria’s naira currency would have an adverse effect on its profits in the coming year. This announcement aligns with the broader challenges faced by multinational companies operating in Nigeria’s challenging economic environment.
The offer made by PZ Cussons involves acquiring the 26.73% stake held by minority shareholders of PZCN for a total of £22.8 million ($28.7 million). The funding for this transaction is expected to be sourced from existing naira cash balances.
PZ Cussons’ move to acquire and delist PZCN comes on the heels of similar decisions by other companies in Nigeria, such as GlaxoSmithKline Nigeria, which recently announced its plans to cease operations in the country as it evaluates transitioning to a third-party distribution model for its pharmaceuticals and consumer healthcare products.