GlaxoSmithKline Consumer Nigeria Plc, the second-biggest drug producer in the West African nation, will cease operations after its UK parent terminated exclusive marketing and distribution agreements with the Lagos-based firm.
(Bloomberg) — GlaxoSmithKline Consumer Nigeria Plc, the second-biggest drug producer in the West African nation, will cease operations after its UK parent terminated exclusive marketing and distribution agreements with the Lagos-based firm.
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.
GSK’s consumer-health arm, Haleon Plc, also informed GSK Nigeria of its “intent to terminate its distribution agreement in the coming months” and appoint a third-party distributor.
GSK UK 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 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 reserves 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.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.