GlaxoSmithKline (GSK) Consumer Nigeria Plans to Cease Operations.
GlaxoSmithKline (GSK) Consumer Nigeria Plc has announced its decision to cease operations in Nigeria. The company, renowned for its pharmaceutical products such as Augmentin, Neosporin, Panadol, Sensodyne, Advair, Ventolin, and Theraflu, revealed its plan to move to a third-party distribution model for its products.
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GSK, producer of Panadol, shuts down operations in Nigeria
The announcement was made in a statement sent to the Nigeria Exchange Limited (NGX) on Thursday and signed by Frederick Ichekwai, the company secretary. GSK Nigeria is currently working with its advisers to determine the next steps and intends to submit a scheme of arrangement to the Securities and Exchange Commission (SEC) for approval. The scheme aims to return cash to shareholders, excluding its parent company, GSK UK.
With over 290 employees, the company assured that it would comply with all necessary legal proceedings concerning employees and shareholders during this transition.
The decision to cease operations comes after GSK UK Group informed GlaxoSmithKline Consumer Nigeria PLC of its strategic intent to stop commercializing its prescription medicines and vaccines in Nigeria through the local operating companies. Instead, GSK plans to shift to a third-party direct distribution model for its pharmaceutical products.
Furthermore, the Haleon Group has also notified the Board of its intent to terminate its distribution agreement in the coming months and appoint a third-party distributor in Nigeria for the supply of its consumer healthcare products.
In light of these developments and after evaluating various options, the Board of GlaxoSmithKline Consumer Nigeria Plc determined that ceasing operations is the only viable course of action.
The company expressed its commitment to treating its employees fairly, respectfully, and with care while meeting all applicable legal and consultation requirements during this process.
Regarding shareholders, the Board is actively working with professional advisors to submit a draft Scheme of Arrangement to the Securities and Exchange Commission. If approved, this scheme will enable shareholders, except GSK UK, to receive an accelerated cash distribution and return of capital.
However, the company also urged shareholders to seek professional advice and exercise caution when dealing with the company’s shares until a further announcement is made.
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As GSK Consumer Nigeria prepares for the transition, it looks forward to the support of the GSK Group and hopes to release full details shortly. Nonetheless, uncertainties remain about the final terms of the scheme or whether it will be approved by the SEC or shareholders.
