GlaxoSmithKline (GSK), a prominent British multinational pharmaceutical and biotechnology company, has recently revealed its decision to withdraw from Nigeria, marking the end of its 51-year-long presence in the country.
In an official statement, GSK Nigeria Plc conveyed that its UK Group has communicated its strategic intent to cease the commercialization of prescription medicines and vaccines in Nigeria through the GSK local operating companies. Instead, the company plans to adopt a third-party direct distribution model for its pharmaceutical products. Additionally, the Haleon Group, a partner of GSK, has also expressed its intention to terminate the distribution agreement and appoint a third-party distributor in Nigeria for the supply of its consumer healthcare products.
Based on this situation, the Board of GlaxoSmithKline Consumer Nigeria Plc has taken the decision to cease operations. The company acknowledged the need to handle the situation with sensitivity and respect towards its employees. They assured that all applicable legal and consultation requirements would be met while engaging with their workforce during the transition.
Recognizing the shareholders' likely concerns, the company's board has been working closely with professional advisors to determine the next steps. GSK intends to submit a draft Scheme of Arrangement to the Securities and Exchange Commission (SEC) soon, which, if approved, may result in accelerated cash distribution and return of capital for shareholders other than GSK UK. However, the company cannot provide any guarantees on the final terms of the scheme or its approval by the SEC or shareholders at this time.
While further details are being prepared for publication, GSK advises shareholders to seek professional advice and exercise caution when dealing with the company's shares until a formal announcement is made.
GlaxoSmithKline Consumer Nigeria Plc was established in Nigeria on June 23, 1971, and commenced business on July 1, 1972, under the name Beecham Limited. The company was listed on the Nigerian Stock Exchange in 1977. Over the years, GSK expanded its operations in the country, establishing a modern drinks factory in Agbara Industrial Estate, Ogun State, in 1982. The factory has since grown to include facilities for manufacturing Oral Healthcare (OHC) and Wellness products, in line with the company's commitment to continuous improvement and meeting consumer demands.
As GSK takes the significant step of exiting Nigeria, the future of its operations and its impact on shareholders remains to be seen. The company will keep stakeholders informed as further developments unfold.
