Unilever is calling time on its dual Anglo-Dutch structure in favour of a single base in London less than two years after an ill-fated plan to move to Holland.
The consumer goods giant said the decision – which scraps a structure that has been in place since 1930 – will give it “greater strategic flexibility”.
Unilever – the group behind household names such as Marmite and Ben & Jerry’s ice cream – gave assurances that its “strong presence in both the Netherlands and the United Kingdom will remain unchanged”, with no plans for staffing, operations or activities to be affected.
But the move will see it ditch its legal base in the Netherlands, with London instead becoming the single site for its legal and corporate HQs.
It comes after Unilever was forced into an embarrassing U-turn on previous plans to switch its headquarters from London to Rotterdam in 2018 following widespread shareholder anger.
The group’s former chief executive, Paul Polman, and previous chairman, Marijn Dekkers, both quit soon after the botched plan.
Unilever said that, following the switch to a single legal structure, it will have its primary stock market listing in London, with a secondary listing in the Netherlands and the US.
It hopes to remain in the European index despite no longer having a primary listing in the Netherlands.
— Alok Sharma (@AlokSharma_RDG) June 11, 2020
Business Secretary Alok Sharma said in a tweet that the single structure decision was a “clear vote of confidence in the UK”.
Unilever – one of the biggest in London’s FTSE 100 Index – hopes the single legal structure will allow it to be more nimble for takeovers as well as demergers, such as the potential spin off of its tea division.
Unilever said it is “clear that the Covid-19 pandemic will create a business environment in which having as much flexibility and responsiveness as possible will be critically important”.
But it raises questions over the possibility of a split of its food arm, which has its headquarters in the Netherlands, from its UK-based home care and beauty and personal care divisions.
Chairman Nils Andersen insisted the move is about “preparing for the future” and not pre-empting any immediate plans for share divestments, listings or acquisitions.
“We do not know what the future holds – we haven’t any plans at the moment,” he said.
He added: “We remain committed to the Netherlands and the UK and there will be no change to Unilever’s footprint in either country as a result of the proposed change to Unilever’s legal parent structure.”
Unilever said it had given assurances to the Dutch government that if it was to spin off its food and refreshment arm, it would do so as a Dutch-listed firm – as long as the Netherlands remains an “attractive headquarter location for business”.
Unileve also revealed that it had not canvassed shareholders over the single structure plans, but said a lower threshold of investor votes was needed to pass the move than for its previous proposal to switch to Rotterdam.
Unilever employs around 6,000 people in the UK and some 2,500 in the Netherlands.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “Any move that contributes to Unilever becoming a more agile machine is a step in the right direction – particularly as coronavirus has accelerated the challenges being seen by a lot of the big brands.”