Unilever has bowed to pressure from shareholders and scrapped plans to move its corporate headquarters from London to Rotterdam.
The consumer goods giant said today that it is withdrawing a proposal to ‘simplify’ its dual-headed Anglo-Dutch legal structure, which would have seen its corporate base move to the Netherlands.
It follows pressure applied by several shareholders over the past few weeks on the firm, which makes the likes of Marmite, Dove soap and Ben & Jerry’s ice cream.
Unilever makes the likes of Marmite (left), Dove soap and Ben & Jerry’s ice cream (right)
Those voicing their disdain included Royal London, Columbia Threadneedle, Legal & General Investment Management, Aviva Investors, Lindsell Train, M&G Investments and Brewin Dolphin.
Unilever said today: ‘We have had an extensive period of engagement with shareholders and have received widespread support for the principle behind simplification.
‘However, we recognise that the proposal has not received support from a significant group of shareholders and therefore consider it appropriate to withdraw.’
Had the move gone ahead, Unilever’s shares were unlikely to have continued trading on the FTSE 100.
Chairman Marijn Dekkers said that the board continues to believe simplifying Unilever’s structure is in the firm’s best interests.
Unilever has scrapped plans to move its headquarters from London (left) to Rotterdam (right)
He said: ‘Unilever has built a long track record of consistent and competitive performance.
Why Unilever’s decision is good news for Britain
The withdrawal means that Britain gets to keep one of its most valuable companies as it moves closer to Brexit.
It is also a victory for UK shareholders, big and small, who had spoken out against the move, which would have kicked the company out of the benchmark FTSE 100 index.
So far, shareholders representing about 12 per cent of the shares had publicly opposed the move.
Their main practical concerns were around the forced selling of their shares with no premium, uncertainty around the future tax treatment of Dutch dividends and a perception that the move was in part aimed at securing the greater takeover protections under Dutch law.
Unilever decided to collapse its Anglo-Dutch structure following a deep business review sparked by last year’s failed $143billion (£109million) takeover approach by Kraft-Heinz.
The stated aim was to make it more efficient and agile in a consumer market that is changing fast.
But Unilever said it recognised that the proposal had not received support from a significant group of shareholders and therefore it considers it appropriate to withdraw.
‘The board continues to believe that simplifying our dual-headed structure would, over time, provide opportunities to further accelerate value creation and serve the best long-term interests of Unilever.
‘The board will now consider its next steps and will continue to engage with our shareholders.
‘We will proceed with the plan to cancel the NV preference shares, further strengthening our corporate governance.’
Unilever was founded in 1930 after the Dutch margarine producer Margarien Unie merged with British soapmaker Lever Brothers.
For over a century, Unilever has maintained a dual-headed structure, with listings on the London, Amsterdam and New York stock exchanges.
But in March, the company announced it was choosing The Netherlands over London to host its headquarters, dealing a blow to Britain’s efforts to keep multinational companies following Brexit.
However, Unilever – whose brands also include PG Tips and Lipton tea, Persil washing powder and Magnum ice cream – has throughout insisted the move to Rotterdam was ‘nothing to do with Brexit’.
The decision followed a failed hostile bid by US rival Kraft Heinz last year, which analysts said played a key role in Unilever’s decision as the Netherlands has stronger rules to protect companies against takeovers.
It also said at the time that its 7,300 workers in the UK and 3,100 in the Netherlands would be unaffected by the changes.
Earlier this week, influential proxy advisory firm PIRC recommended shareholders vote against the move, which would have seen the firm kicked off the benchmark FTSE 100 index.
Friday’s announcement will come as a slap to Dutch Prime Minister Mark Rutte, whose government has been angling for post-Brexit business from Britain.
Rutte faces opposition to a plan to scrap a dividend tax in a bid to attract international firms and cash in on Britain’s departure from the EU.
Unilever employs about 169,000 people around the world. Shares were up around 1 per cent at 4,116p in early morning trade.
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