GlaxoSmithKline to cease operation in Nigeria

 

GlaxoSmithKline Plc (GSK), a British multinational drug maker and biotechnology company on Thursday announced its intention to cease operations in Nigeria.

This announcement was made known in a statement filed at the Nigerian Exchange (NGX).

The statement explained that GSK’s operations in Nigeria will cease the commercialisation of its prescription medicines and vaccines through its Nigerian subsidiary.

This means that its activities in the country now entail the distribution of its pharmaceutical products through a third party only.

The decision cuts GSK’s ties of more than half a century with Africa’s largest economy, where it commenced business in 1972 through its precursor, Beecham Limited.

Part of the statement read, “In our published Q2 results we disclosed that the GSK UK Group has informed GlaxoSmithKline Consumer Nigeria Plc of its strategic intent to cease commercialization of its prescription medicines and vaccines in Nigeria through the GSK local operating companies and transition to a third-party direct distribution model for its pharmaceutical products.”

GSK said it is holding talks with advisors who will inform shareholders of the next course of action and will work out a quick cash distribution and return of capital to shareholders, excluding GSK UK, if the Securities and Exchange Commission (SEC) sanctions the plan.

In responsibility to shareholders, the statement said that the “board is conscious that shareholders will have many questions; we have been working assiduously with our professional advisors to agree on the next steps and we will be shortly submitting to the Securities and Exchange Commission, a draft Scheme of Arrangement which may, if approved, see shareholders other than GSK UK, receive an accelerated cash distribution and return of capital.”

Meanwhile, GSK said it will appoint a third-party distributor in Nigeria for the supply of its consumer healthcare products.

The release fell on the same day GSK Nigeria published its half-year 2023 financials showing a plunge by almost half in revenue to N7.8 billion from N14.8 billion a year ago.