GlaxoSmithKline Nigeria Plc, a major player in the pharmaceutical industry, has recently declared its intention to cease operations, shifting to a third-party distribution model for its array of pharmaceutical products. Renowned for an extensive portfolio that includes household names like Augmentin, Neosporin, Panadol, Sensodyne, Advair, Ventolin, and Theraflu, GSK Nigeria’s move represents a significant change in the pharmaceutical landscape of the country.
The announcement was formally made via a statement issued to the Nigeria Exchange Limited (NGX) on Thursday. The communication was signed by Frederick Ichekwai, the company secretary of GSK Nigeria. This move is seen as a shift in strategy, aiming to streamline operations by transitioning to a distribution model that involves third-party entities.
GSK Nigeria has assured stakeholders that it is taking all necessary steps to address potential concerns. It is actively working with advisers to formulate the next steps, which include a proposed scheme of arrangement to be submitted to the Securities and Exchange Commission (SEC). If approved, this scheme will result in returning cash to shareholders, with the exception of its parent company, GSK UK.
GlaxoSmithKline Nigeria, an employer to over 290 people, has guaranteed adherence to all legal proceedings concerning employees and shareholders alike. According to the statement, “In our published Q2 results we disclosed that the GSK UK Group has informed GlaxoSmithKline Consumer Nigeria PLC of its strategic intent to cease commercialization of its prescription medicines and vaccines in Nigeria through the GSK local operating companies and transition to a third-party direct distribution model for its pharmaceutical products.”
Additionally, the Haleon Group – another key player in the scenario – has expressed its intention to terminate its distribution agreement within the coming months. The company plans to appoint a third-party distributor in Nigeria for the supply of its consumer healthcare products. This decision further solidifies the shifting landscape of pharmaceutical operations in Nigeria.
The Board of GSK Nigeria has stated that given the circumstances and the evaluations done in concert with GSK UK, the only viable path forward is to cease operations. As this substantial decision was made, the welfare of employees was prioritized, with a commitment to treating all employees fairly and respectfully while meeting all legal requirements and responsibilities.
Furthermore, the company acknowledged that shareholders would naturally have many questions concerning this major shift. The Board reassured them, stating, “We have been working assiduously with our professional advisors to agree on the next steps, and we will be shortly submitting to the Securities and Exchange Commission (“SEC”) a draft Scheme of Arrangement which may if approved, see shareholders other than GSK UK, receive an accelerated cash distribution and return of capital.”
The company advised shareholders to seek professional advice and exercise caution while dealing with the company’s shares until further announcements are made.
This decision by GlaxoSmithKline Nigeria represents a significant shift in the Nigerian pharmaceutical industry, with potential implications for healthcare delivery, employees, shareholders, and consumers alike. As we continue to monitor the situation, all eyes will be on the upcoming decisions by the Securities and Exchange Commission (SEC) and the responses from shareholders. For now, the future of GSK Nigeria lies in the balance, with many waiting for the next chapter in this unfolding saga.