August 03, (THEWILL) – Nigeria’s equities market will lose N55.3 billion market capitalisation following GlaxoSmithKline’s (GSK), plan to close its operations in Nigeria after 51 years.
The British multinational .pharmaceutical and biotechnology company which commenced operations in Nigeria in 1972 was listed on the Exchange in 1977. The current market price of the company is N55.3 billion.
“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,” GSK Nigeria Plc said in a statement.
It added, “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 Board of GlaxoSmithKline Consumer Nigeria Plc has concluded that there is no alternative but to cease operations,” GSK Nigeria said in an official statement signed by its company secretary, Frederick Ichekwai.
“Today we are briefing our employees whom we will treat fairly, respectfully and with care, meeting all applicable legal and consultation requirements,” the company said.
The company said its board is conscious that shareholders will have many questions; “We have been working assiduously with our professional advisors to agree on 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 Board acknowledges the support of the GSK Group in its intentions to make this possible, full details of which we hope to publish shortly. In the meantime, however, we cannot give you assurance of the final terms of any scheme, or that any scheme will be approved by the SEC or by shareholders,” GSK said.
It added, “Shareholders are advised to seek professional advice and continue to exercise caution when dealing in the company’s shares until a further announcement is made.”
GlaxoSmithKline Consumer Nigeria Plc was incorporated in Nigeria on 23rd June 1971 and commenced business on 1st July 1972, under the name Beecham Limited. Its Head office is located at 1 Industrial Avenue, Ilupeju, Lagos.
.In 1982, in order to expand its operations in the country, an ultra-modern drinks factory was established in Agbara Industrial Estate, Ogun State, which has since been expanded to include facilities to manufacture Oral Healthcare (OHC) and Wellness products.
“In line with our commitment to continuous improvement, we regularly update our facilities to meet the ever-increasing demands of our consumers,” the company said..
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
