In regards to a possible divestment, PZ Cussons Nigeria Plc (PZCN) declared that it has not yet received any official notice from PZ Cussons Plc, its parent company. In an effort to lessen its exposure to Naira swings, PZ Cussons Plc announced that it is thinking of selling all or a portion of its African businesses. According to reports, the corporation has had multiple proposals for the sale. PZCN declared that it will supply more information as it becomes available.
The CEO of PZ Cussons, Jonathan Myers, emphasized the serious economic difficulties facing Nigeria, such as the depreciation of the naira and high rates of inflation, which have had a detrimental impact on the company’s financial results. This evaluation follows its unsuccessful attempt earlier this year to purchase the minority stakes in PZCN. The company attempted to purchase the remaining 26.73% minority shares of PZCN in September 2023 for ₦21 per unit, but the Securities and Exchange Commission (SEC) turned down the proposal.
To diversify its business, the firm has taken some calculated risks.
Also, in its Nigerian subsidiary, PZ Cussons currently has a 73.27% share. With its start in commodity trading between West Africa and the UK in 1884, the company has a long and illustrious history. Founded in 1899, the corporation quickly expanded throughout Africa, Europe, and Asia, with its first branch office located in Nigeria. Through its incorporation as a private company, the firm developed its first soap plant in Nigeria by 1948. Further establishing its position in the area, it went public on the Nigerian Stock Exchange in 1972.
With a robust portfolio that includes well-known brands like Mamador Oil, Carex, and Haier Thermocool, PZ Cussons Nigeria works now in the personal care, home care, food, and electrical sectors. It has encountered several economic difficulties in Nigeria throughout the years, including as recessions and shifts in the purchasing power of consumers. In order to bolster and diversify its business, the company has taken a number of calculated risks. This covers joint ventures like PZ Wilmar, a company that refines Palm Oil and produces food components, as well as the purchase of names like Minerva and St. Tropez.
Investors have shown interest in PZ’s African activities.
Nonetheless, in comparison to pre-recession levels, Revenue and net income have decreased recently. In 2018, the company reported a net income of ₦1.9 billion, down from ₦5.1 billion in 2014. PZ Cussons launched a plan to resume sustainable growth in 2021, concentrating on increasing profitability and optimizing business processes. The company’s Financial Stability has been harmed by Nigeria’s macroeconomic challenges, particularly the depreciation of the naira. As a result, the business has been considering its strategic options, such as selling its properties in Africa.
Its efforts to optimize its portfolio and concentrate on areas where it can sustain a competitive advantage are reflected in this action. Several domestic and foreign Investors have expressed interest in PZ Cussons’ African activities. To unlock value for shareholders, the corporation sees these offerings as opportunities. The circumstances surrounding PZ Cussons in Africa may change dramatically if a partial or whole sale is carried out, possibly resulting in changes to the dynamics of the market and brand ownership.
This possible divestment may have a big impact on local firms & employees.
Employees and regional business partners of the company who depend on the stability of these activities may also be significantly impacted by such a transaction. The possible divestment may have a big impact on local companies, stockholders, and employees. Workers may experience employment insecurity, and changes in ownership or operational priorities may have an impact on nearby companies that depend on the company’s supply chain. Based on the changing strategic direction following the disposal, shareholders, especially minority ones, may notice changes in the value of the stock and dividend policy.