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Unilever: UK's third biggest company scraps plans to move HQ from London to Rotterdam

Anglo-Dutch consumer goods giant, which owns household brands including Marmite and Dove, had faced shareholder revolt over proposal

Chris Baynes
Friday 05 October 2018 08:23 BST
Paul Polman insists Unilever's Rotterdam move is not a result of Brexit

Unilever, Britain’s third biggest company, has abandoned plans to move its headquarters out of the UK amid mounting opposition from investors.

The Anglo-Dutch consumer goods giant said it was scrapping proposals to consolidate its corporate structure in the Netherlands.

The announcement on Friday followed weeks of pressure from major shareholders in the company, which owns household brands including Marmite, Dove and Ben & Jerry’s.

In a statement, Unilever said: “We have had an extensive period of engagement with shareholders and have received widespread support for the principle behind simplification. However, we recognise that the proposal has not received support from a significant group of shareholders and therefore consider it appropriate to withdraw.”

However, chairman Marijn Dekkers added, Unilever’s board continued to believe that simplifying the company’s structure was in its best interests.

He 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.”

Unilever first announced in March that it intended to simplify the business from two legal entities into one, based at its Dutch headquarters in Rotterdam.

It dealt a major blow to the UK government’s hopes of maintaining Britain’s status as a major centre for business after it leaves the EU.

However, Unilever has always insisted the move to Rotterdam was “nothing to do with Brexit”.

It had also assured its 7,300 workers in the UK and 3,100 in the Netherlands they would be unaffected by the changes.

But the company had faced possible defeat in a shareholder vote on the move later this month.

Last week Legal & General, one of Europe’s largest asset managers, announced it would vote against plans, citing “significant client enquiries” about the move away from London.

Aviva, which owns 1.4 per cent of Unilever, was among other major investors who were unconvinced.

The Investment Association, which represents hundreds of UK fund managers, said it welcomed the decision to scrap the move.

A spokesperson for the body said: “The feedback from many of our members has been that there was no compelling reason for plc shareholders to accept the proposed simplification in this form. They did not believe it would be in the long term interests of their clients, and would have resulted in many shareholders being forced to sell their shares.”

Business secretary Greg Clark also applauded Unilever’s decision to abandon the move, saying the company had “a long and proud history in the UK”.

Unilever, which has been partly based in Britain for more than a century, had said locating its HQ in Rotterdam would make it more flexible.

The company employs about 169,000 people around the world.

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