GlaxoSmithKline Consumer Nigeria Plc, the second-biggest drug firm in the West African nation, will cease operations after its UK parent terminated exclusive marketing and distribution agreements with the Lagos-based company.
(Bloomberg) — GlaxoSmithKline Consumer Nigeria Plc, the second-biggest drug firm in the West African nation, will cease operations after its UK parent terminated exclusive marketing and distribution agreements with the Lagos-based company.
GSK Plc, which owns a majority stake in the Nigerian unit, said it will appoint third-party distributors to sell its prescription medicines and vaccines in the country, according to a statement published on the website of the Lagos-based Nigeria Exchange.
Similarly, GSK’s former consumer-health division, now called Haleon Plc, informed GSK Nigeria of its “intent to terminate its distribution agreement in the coming months” and appoint a third-party distributor.
GSK Nigeria is in talks with the Nigerian Securities and Exchange Commission about “an accelerated cash distribution and return of capital” to minority shareholders, the company said.
While no reason was given for the termination of the agreements, GSK Nigeria had previously said it was struggling to maintain supplies of its pharmaceutical and vaccine products in the country due to a shortage of dollars to import ingredients.
The central bank in Africa’s largest economy limited foreign currency sales to companies to help manage the value of the naira and preserve its foreign-exchange reserve that has come under pressure from drop in crude sales which accounts for about 80% export earnings. The central bank has since allowed the naira to trade more freely but dollar liquidity remains low.
(Corrects second deck head to show GSK UK had no manufacturing in Nigeria and also third and fourth paragraphs to show that the Haleon Group is not unit of GSK UK and GSK Nigeria is in discussions with the Nigerian SEC.)
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