Consumer goods maker PZ Cussons has confirmed it plans to delist its Nigeria unit from the Nigerian stock exchange after buying out 26.73% stake in the company held by minority shareholders.
Delisting means the company will be wholly-owned by its parent company and will no longer be publicly traded.
The UK-headquartered company is offering all other shareholders ₦21 per share. The firm said in a statement on Tuesday that it believed the offer to be attractive for minority shareholders in Nigeria, particularly given the “recent macroeconomic developments and foreign exchange challenges.”
“The Group believes the transaction will significantly simplify and strengthen its business in Nigeria, putting in place a sustainable structure and platform to maximise long-term growth and value,” it said.
The buyout will cost the company £22.8 million (N21.7 billion) in cash and funding for the transaction is expected to come from existing Naira cash balances.
The offer is subject to the approval of the board and minority shareholders of PZ Cussons Nigeria as well as regulatory approvals.
Why this matters
Inflation in Nigeria, which has been in double digits since 2016, rose to its highest level in nearly two decades in July at 24.08% against 22.79% in June after the new administration of Bola Tinubu removed scrapped subsidy on petrol and devalued the naira.
PZ Cussons said in June that 10% devaluation of the currency would cause it to lose N22.4 billion revenue and a profit decline by N2.9 billion in its full year report.
But the company said the naira reform will be positive in the longer term.
Last month, GlaxoSmithKline Nigeria said it planned to stop doing business after evaluating the options for moving to a third-party distribution model for its drugs and consumer healthcare goods.
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Following PZ Cussons Nigeria’s announcement of the planned buyout on Monday, its shares rose 9.14% to close at N19.1 at the Nigeria Exchange Limited.
PZ Cussons Nigeria Plc produces and markets family care brands such as Premier, Joy and Morning Fresh, and the Haier-Thermocool venture with Haier.
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