GSK Nigeria to cease operations, return cash to shareholders

August 04, 2023 (MLN): The Board of Directors (BoD) of GlaxoSmithKline (GSK) Consumer Nigeria Plc on Thursday announced to cease operations as GSK UK Group has decided to transition to a third-party direct distribution model for its pharmaceutical products, said a notice issued by GSK Nigeria on the same day.

GSK UK informed GSK Consumer Nigeria PLC of its strategic intent to cease the commercialization of its prescription medicines and vaccines in Nigeria through the GSK local operating companies.

Moreover, the Haledon Group has also separately informed the company of its intent to terminate its distribution agreement in the coming months and to appoint a third-party distributor in Nigeria for the supply of its consumer healthcare products.

The company’s Q2 earnings showed that sales dropped to 7.75 billion naira ($9.82 million), from 14.8bn naira in SPLY due to immense competition from local companies and imports from India and China.

It is worth noting that earlier in 2022, GSK exited the Kenyan market.

“Today we are briefing our employees whom we will treat fairly, respectfully, and with care, meeting all applicable legal and consultation requirements,” the notice reads.

The company further states that shareholders will have many questions and the board has been working assiduously with its professional advisors to agree on the next steps and all necessary documents will be shortly submitted to the Securities Commission.

The shareholders of the company will be entitled to a cash distribution and return of capital.

Shares in GSK Nigeria, in which British drugmaker GSK has a 46.4% stake and Nigerian shareholders the remaining 53.6%, closed at 8.10 naira, down from a peak of 42.24 naira in 2014.

Copyright Mettis Link News