PZ Cussons, the renowned soap maker based in Manchester, has revealed its intentions to acquire the minority shareholders of PZ Cussons Nigeria and subsequently remove the business from the Nigerian stock exchange. The decision to take this step is attributed to the “foreign exchange challenges” experienced in Nigeria.
According to the company, “The group believes the offer to be attractive for the minority shareholders of PZ Cussons, particularly given the recent macroeconomic developments and foreign exchange challenges.”
Inflation in Nigeria, the largest economy in Africa, has remained in double digits since 2016 and reached its highest level in nearly two decades in July, with a rate of 24.08% compared to 22.79% in June. This surge was driven by the removal of a popular but costly petrol subsidy and the devaluation of the national currency.
PZ Cussons had previously stated in June that the devaluation of the Nigerian naira would have an adverse impact on its profits in the coming year.
PZ Cussons’ proposed offer calls for paying £22.8 million ($28.7 million) to acquire the 26.73% stake that minority shareholders of PZCN hold. The funding for this transaction is expected to be sourced from existing naira cash balances.
This announcement comes shortly after GlaxoSmithKline Nigeria disclosed its plans to discontinue its operations, considering alternative distribution models for its pharmaceuticals and consumer healthcare products.
