British multinational drugmaker and biotechnology company GlaxoSmithKline Plc (GSK) said Thursday it is drawing the blinds on its Nigerian subsidiary after a “strategic intent” to consider other favourable business options.
GSK’s operations in Nigeria will no longer involve commercialising its prescription drugs and vaccines, meaning its activities in the country now entail the distribution of its pharmaceutical products through a third party only.
“The Haleon Group has also separately informed the Board 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 said in a note to the Nigerian Exchange.
The decision cuts GSK’s ties of more than half a century with Africa’s largest economy, where it commenced business in 1972 through its precursor, Beecham Limited.
That partnership has birthed a broad range of top-of-the-line products from consumer brands like Ribena, Lucozade, Macleans and Sensodyne to popular medicines like Panadol and Andrews Liver Salt, which many Nigerians have developed an affinity for.
“Today we are briefing our employees whom we will treat fairly, respectfully and with care, meeting all applicable legal and consultation requirements,” the company assured.
GSK said it is holding talks with advisors who will inform shareholders of the next course of action and will work out a quick cash distribution and return of capital to shareholders, excluding GSK UK, if the Securities and Exchange Commission sanctions the plan.
The release fell on the same day GSK Nigeria published its half-year 2023 financials showing a plunge by almost half in revenue to N7.8 billion from N14.8 billion a year ago.
Earlier this year in March, Unilever, another British consumer product powerhouse Unilever announced an end to the production of its homecare and skin-cleansing products, notably Lux, Sunlight and Omo, saying “These categories are margin dilutive and the exit is part of the company’s aim to make its operation in Nigeria competitive and profitable.”