FX Crisis: PZ Cussons to Sell Nigerian Subsidiaries Amid Financial Challenges

In response to Nigeria’s ongoing FX crisis and the significant devaluation of the naira, multinational consumer goods company PZ Cussons has initiated plans to sell its Nigerian subsidiaries. The decision to sell Nigerian subsidiaries comes as the company seeks to mitigate its exposure to currency fluctuations, with the naira losing 70% of its value over the past year.

The company, which has a significant presence in Nigeria, stated that the move is aimed at reducing financial strain caused by the weakening naira. PZ Cussons to sell Nigerian subsidiaries is seen as part of a broader strategy to streamline its portfolio and focus on markets where it remains highly competitive.

According to a recent report released by the company, PZ Cussons highlighted that the naira devaluation had severely impacted its financial performance, resulting in a £107.5 million foreign exchange loss. The report further revealed that the company has received multiple expressions of interest from potential buyers for its African business, which includes its Nigerian operations.

PZ Cussons to sell Nigerian subsidiaries comes amid growing operational challenges in the region. The company noted that despite working to alleviate the impact of the devaluation on its business, continuing inflation and economic difficulties in Nigeria have made it increasingly hard to maintain profitability. Furthermore, PZ Cussons has reported significant losses in recent quarters, with a N94.78 billion loss recorded in the third quarter of 2023/2024.

As the FX crisis deepens, PZ Cussons to sell Nigerian subsidiaries is a move that reflects the difficult operating conditions for multinational businesses in Nigeria, particularly those grappling with the volatile exchange rate. The company’s decision to sell its African business could involve either a partial or full sale, as it considers ways to protect its shareholders and maintain long-term growth.

While PZ Cussons continues to perform well in other markets, especially in the UK, its exit from the Nigerian market could signal a broader retreat by foreign investors facing similar challenges in the region. The sale process is still in its early stages, and further updates are expected as the company continues negotiations with interested parties.