Clean-up job for Unilever as headquarters move goes disastrously wrong

08 October, 2018, 05:05 | Author: Regina Silva
  • The Lyons tea owner had planned to scrap its Anglo Dutch dual listing and relocate its headquarters to the Netherlands

Unilever has bowed to pressure from shareholders and scrapped plans to move its corporate headquarters from London to Rotterdam.

The climbdown comes three weeks ahead of the planned vote on the proposal and is a victory for shareholders who opposed the move, which would have kicked the maker of Marmite, Dove soap and Ben & Jerry's ice cream out of the benchmark FTSE 100 index.

Unilever's share price has slipped marginally into the red in London this morning, and as of 08:37 BST, was 0.29 percent down at 4,066.00 points.

A spokesman for Unilever said: "In developing the proposal, the board was guided by the opportunity to unlock value for our shareholders by creating a stronger, simpler and more competitive Unilever that is better positioned for long-term success".

The FTSE 100-consumer goods giant said in a statement that the proposal to relocate to the Netherlands and list exclusively on the Amsterdam stock exchange had "not received support from a significant group of shareholders" after it outlined the plans in September.

"The Board will now consider its next steps and will continue to engage with our shareholders", Unilever's chairman Marijn Dekkers commented in the statement.

The decision means that both the UK-based and the Netherlands-based Unilever companies will remain.

The Financial Times meanwhile quoted Berenberg analyst James Targett as saying in a note that this was "clearly a win for United Kingdom plc but frustrating for Unilever".

But at least 10 shareholders, which collectively own around 12 percent of Unilever PLC, had publicly opposed the move.

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Far right leader Geert Wilders said Rutte should resign over the Unilever debacle - calling him a "leader in decay" - and said there should be a vote of no-confidence in the government.

The decision followed a failed hostile bid by United States rival Kraft Heinz past year, which analysts said played a key role in Unilever's decision as the Netherlands has stronger rules to protect companies against takeovers.

The stated aim was to make it more efficient and agile in a consumer market that is changing fast.

The decision followed a failed hostile bid by USA rival Kraft Heinz previous year, which analysts said played a key role in Unilever's decision as the Netherlands has stronger rules to protect companies against takeovers.

Unilever's plan was to move its headquarters to Rotterdam and have its shares traded on the Euronext stock exchange in Amsterdam.

Unilever operates in 190 countries and has kept dual headquarters since its creation from the 1930 merger of Margarine Unie of the Netherlands and United Kingdom soapmaker Lever Brothers.

It also said at the time that its 7,300 workers in the United Kingdom and 3,100 in the Netherlands would be unaffected by the changes.

It dealt a major blow to the UK Government and its efforts to uphold Britain's status as a centre for business after Brexit.

The cabinet is to reconsider the controversial plans to scrap the tax on dividends, prime minister Mark Rutte said at his weekly press conference on Friday.

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