- GSK Nigeria announced the development in a statement sent to the Nigeria Exchange Limited (NGX) on Thursday
- The company said it plans to halt operations after evaluating options to move to a third-party distribution model
GlaxoSmithKline (GSK) Consumer Nigeria revealed on Thursday that it will close its production line in Nigeria due to the unfavorable economic situation.
The company said it plans to cease operations after evaluating options for moving to a third-party distribution model for its pharmaceutical products.
The company is well known for its products like Augmentin, Neosporin, Panadol, Sensodyne, Advair, Ventolin, Theraflu, etc.
GSK Nigeria announced the development in a statement sent to the Nigeria Exchange Limited (NGX) on Thursday and signed by Company Secretary Frederick Ichekwai.
The company said it was working with its advisors to agree on the next steps and plans to submit an arrangement scheme to the Securities and Exchange Commission (SEC), which, if approved, would see the money returned to shareholders except for parent company GSK UK.
The company, which has more than 290 employees, has assured that all necessary legal action will be taken against employees and shareholders.
‘In our published Q2 results we disclosed that GSK UK Group has acquired GLAxoSmithKline Consumer Nigeria PLC through GSK local operating companies to cease commercialization of its prescription drugs and vaccines in Nigeria and in a direct third party distribution model.
Communicated its strategic intent to transition for its pharmaceutical products,” the statement reads.
“The Haleon Group has also separately informed the Board of Directors of its intention to terminate its distribution agreement in the coming months and appoint a third party distributor in Nigeria to supply its health products.
“For the above reasons, and after evaluating various other options, in conjunction with GSK UK, the Board of GlaxoSmithKline Consumer Nigeria Plc has concluded that there is no alternative but to cease operations.
“Today we are informing our employees that we will treat them fairly, respectfully and carefully, meeting all applicable legal and counseling requirements.
“The Board recognizes that shareholders will have many questions; We have been working diligently with our professional advisers to agree on the next steps and we will shortly submit a draft Scheme of Arrangement to the Securities and Exchange Commission (“SEC”) which, if approved, may include shareholders other than GSK UK receive an accelerated cash distribution and capital return.
“The committee acknowledges the support of the GSK Group in their determination to make this possible.
Full details we hope to publish soon.
Meanwhile, however, we cannot guarantee you the final terms of any plan or that any plan will be approved by the SEC or stockholders.
“Shareholders should seek professional advice and continue to exercise caution when trading the company’s shares until further notice.”
