Amid opposition from shareholders, dual-listed Unilever has abandoned a plan to move its headquarters to the Netherlands under a restructuring exercise that would have incorporated the Anglo-Dutch consumer goods giant into a single legal entity outside of London.
In March, the maker of Ben & Jerry’s ice cream and Hellmann’s mayonnaise announced it planned to shift its HQ to Rotterdam.
At the time, Unilever said its decision was based on the fact 55% of its combined ordinary shares were owned by the Netherlands’ operation. Unilever has been owned through two separately-listed companies, a Dutch N.V. and a UK plc, since its formation in 1930. Still, it said then some of its operations would continue to be based in the UK capital and it would maintain listings in London, Amsterdam and New York.
However, investors in the UK were against the plan on concerns they would have to sell their shares listed on the FTSE-100. As a consequence, Unilever said in a statement today (5 October) the “proposal has not received support from a significant group of shareholders and therefore consider it appropriate to withdraw”.
But the company did say today it had received “widespread support for the principle behind simplification”.
Chairman Marijn Dekkers said: “Unilever has built a long track record of consistent and competitive performance. 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.”
The decision announced in March was seen by some as a backlash to the UK’s decision to leave the European Union. And now it is unclear what other options are open to Unilever if some investors favour the simplification process.
“We recognise the proposal has not received support from a significant group of shareholders and therefore consider it appropriate to withdraw,” according to today’s statement.
An analysis from just-food in March, revealed M&A might be the bigger reason for Unilever to consider leaving London rather than Brexit.