Published: Mon, October 08, 2018
Economy | By

Unilever cancels planned move to Rotterdam after Brexit

Unilever cancels planned move to Rotterdam after Brexit

Anglo-Dutch consumer goods multinational Unilever, whose brands include Knorr and Dove, has scrapped a plan to consolidate its headquarters in the Netherlands following opposition from British shareholders.

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

Waldschmidt said the bigger drivers for Unilever's shares were U.S. interest rates and continued difficulties in emerging markets, particularly related to their currencies. While the proposal was part of the company's plans to unlock value for shareholders in the wake of Kraft-Heinz's failed bid, it resulted in a massive investor rebellion.

The statement also added how the company 'recognised that the proposal has not received support from a significant group of shareholders and therefore consider it appropriate to withdraw'.

Describing Unilever's decision as "disappointing", Rutte said: 'We did not take this measure just for one company.

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".

"For some of the British shareholders, the political debate that erupted in the Netherlands over the government's plan to scrap the dividend tax was a factor in them not supporting the proposal by the board" to move Unilever's HQ, Polman told NOS public television.

Chairman Marijn Dekkers left the door open for a move in the future, insisting on Friday that the board continued to believe simplifying Unilever's structure remains in the firm's best interests.

It also followed a failed hostile bid by U.S. 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.

Unilever claimed that transitioning to a simplified corporate structure would create a simpler more focused company, allowing it to manage disposals and acquisitions in a more efficient manner.

Earlier this week, influential proxy advisory firm PIRC recommended shareholders vote against the move.

Another service, IVIS, which is the corporate governance research service of the Investment Association, issued a "red top" recommendation on the move on Friday, its strongest level of concern.

Unilever's climbdown was "good news for United Kingdom plc", said Rebecca O'Keeffe of Interactive Investor, adding: "The vote had been its own version of Brexit and had not gone down well with its core United Kingdom investors".

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.

Unilever's London-listed shares were down 1 percent at 0957 GMT, while its Dutch shares were down 0.2 percent.

The biggest performance drivers now are USA interest rates and difficulties in emerging markets, particularly related to currencies, said Liberum analyst Robert Waldschmidt.

Unilever was advised by its corporate brokers, UBS and Deutsche Bank, and its legal adviser, Linklaters.

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