GlaxoSmithKline (GSK) Consumer Nigeria Plc has announced its intention to discontinue its operations, following a strategic assessment of options for transitioning to a third-party distribution model for its pharmaceutical products. The company, recognized for products like Augmentin, Neosporin, Panadol, Sensodyne, Advair, Ventolin, and Theraflu, communicated this decision through a statement sent to the Nigeria Exchange Limited (NGX) on Thursday. The statement, signed by Frederick Ichekwai, the company secretary, detailed GSK Nigeria’s plans.
In its statement, GSK Nigeria revealed that it is collaborating with advisors to determine the subsequent steps and intends to present a scheme of arrangement to the Securities and Exchange Commission (SEC). The scheme, if approved, aims to return cash to shareholders, with the exception of GSK UK, the parent company.
Despite the decision to cease operations, the company assured that all requisite legal processes would be adhered to concerning both employees and shareholders.
“In our Q2 results, we disclosed that GSK UK Group has communicated its strategic intent to discontinue the commercialization of prescription medicines and vaccines in Nigeria through GSK local operating companies, transitioning instead to a third-party direct distribution model for pharmaceutical products,” the statement explained.
The Haleon Group, separately, also informed the company of its intent to terminate distribution agreement in the near future and to appoint a third-party distributor in Nigeria for its consumer healthcare products.
Due to these developments and an evaluation of various alternatives in collaboration with GSK UK, the Board of GlaxoSmithKline Consumer Nigeria Plc concluded that the most viable option is to halt operations.
“We are presently notifying our employees, who will be treated fairly and respectfully while adhering to all relevant legal and consultation requirements,” the statement continued.
Recognizing the anticipated inquiries from shareholders, the company mentioned that it has been diligently working with professional advisors to establish the next course of action. It plans to submit a draft Scheme of Arrangement to the Securities and Exchange Commission (SEC) in the near future. This scheme could potentially lead to accelerated cash distribution and capital return for shareholders other than GSK UK. However, the specifics of the scheme and its approval are yet to be confirmed.
The company advised shareholders to seek professional advice and exercise caution when dealing with the company’s shares until further announcements are made.