Published: Fri, March 16, 2018
Markets | By Terence Owen

Unilever Switches Head Office To Rotterdam In Corporate Structure Shakeup

Unilever Switches Head Office To Rotterdam In Corporate Structure Shakeup

Softening the blow to the U.K., Unilever plans to base its beauty and personal-care division and the home-care business in London.

Consumer goods giant Unilever is to turn away from London as it embraces Rotterdam as its sole corporate headquarters, ending an 88-year history of dual governance where it straddled both.

As David Pollard reports, the decision by Britain's third largest company is a blow to Prime Minister Theresa May's government nearly one year to the day before Brexit.

Unilever, an Anglo-Dutch consumer goods company whose products include Magnum, Lipton, Ben & Jerry's, is abandoning its London headquarters in favour of the Netherlands, the latest setback to Prime Minister Theresa May who is trying to retain corporates in the United Kingdom after Brexit.

Paul Polman, chief executive of Unilever, pledged that the board would review the company's dual legal structure and stock market listings previous year after a surprise £115-billion takeover approach by Kraft Heinz.

Upon completion, Unilever N V's preference shares will be cancelled, and it is meant to close the N V Trust Office and terminate the related depositary receipt structure.

Unilever has been owned through two separately listed companies, a Dutch N.V. and a UK PLC, since its formation in 1930.

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However, its shares will continue to be listed in London as well as Amsterdam and NY. Unilever has been weighing up whether to headquarter in London or Rotterdam for quite some time, sparking debate over the impact that Brexit is having on business decisions - and has now finally reached a decision, choosing the Netherlands over Britain.

And Unilever chief financial officer, Graeme Pitkethly, told the Guardian Brexit "was absolutely not a factor" in the decision, which was announced after a board meeting and a year-long review.

Unilever, producer of many well known daily necessities brands, such as Lipton tea, Dove soap, Axe deodorant and Jerry's ice cream, stated that it intends to change from two legal entities into one single legal entity, incorporated and tax-resident in the Netherlands.

"Unilever's dual-headed legal structure does not technically impede its ability to issue equity or demerge assets, but it makes it significantly more complex", Pinar Ergun, a UBS analyst, said in a recent research note.

According to Marijn Dekkers, chairman of Unilever, "Unilever's Board is fully committed to delivering long-term performance and sustainable value for shareholders".

The move will have no impact on its 7,300 employees in Britain and 3,100 in the Netherlands, the company said.

The company has had talks with the governments of both countries in the run-up to its decision.

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