Unilever moves headquarters to Rotterdam after almost a century in London

Britain’s third largest company had been structured as two legal entities and will now be a single one, based in the Netherlands

Paul Polman insists Unilever's Rotterdam move is not a result of Brexit

Unilever, one of the UK’s best known corporate giants, has announced it will be consolidating its legal headquarters in Rotterdam, dealing a sharp blow to Britain’s status as a European business hub ahead of Brexit.

The consumer goods giant, which is the UK’s third largest company and has up until now been based in both the UK and the Netherlands, on Thursday said that it was shaking up its corporate structure. Under the changes it will operate three divisions. Its beauty and personal care division, as well as its home care division, will be based in London, while its food and refreshment division will be based in Rotterdam.

Unilever said that it also intends to simplify from its current structure of being two legal entities, transforming into one legal entity that will be incorporated in the Netherlands.

The company said that the decision reflects the fact that the shares currently listed in the Netherlands account for approximately 55 per cent of the group’s combined ordinary share capital and also trade with greater liquidity than the ones listed in London.

However, the maker of Dove soap, Marmite and Ben & Jerry’s ice cream will continue to have its shares listed in the capital, as well as in Amsterdam and New York, following the changes. Unilever also said its employment of 7,300 people in the UK and 3,100 people in the Netherlands will be unaffected by the changes.

“Unilever’s board is fully committed to delivering long-term performance and sustainable value for shareholders,” said chairman Marijn Dekkers.

“The board believes the move to three divisions and the simplification of our corporate structure will create a simpler, more agile and more focused company with increased strategic flexibility for value-creating portfolio change,” he added.

Unilever, which was formed in 1930 through a merger between Dutch margarine producer Margarine Unie and UK soap-maker Lever Brothers, last year already announced it was reviewing its dual-headed corporate structure in the aftermath of it fending off an attempted $143bn takeover from Kraft Heinz.

As one of the largest companies in the UK, the group is a major contributor to the economy.

In addition to its London headquarters, it has three global research facilities at Port Sunlight in Merseyside, Colworth in Bedfordshire, and Leeds, as well as manufacturing sites and distribution depots all around the UK.

Unilever has annual UK sales of around £1.8bn, and many of its products – including Persil, Dove, Magnum, Flora, Marmite and Lynx – are market leaders.

In the lead-up to Thursday’s announcement, Unilever reportedly met with the governments of both the UK and the Netherlands. The Dutch Prime Minister Mark Rutte is a Unilever veteran himself.

Although the company did not specifically cite Brexit as a reason for its move, the decision is expected to bruise Theresa May’s government with just a year to go until the UK is due to quit the trading bloc.

Asked about the announcement, a government spokesman welcomed Unilever’s continued commitment and its promise to protect jobs.

“Its decision to transfer a small number of jobs to a corporate HQ in the Netherlands is part of a long-term restructuring of the company and is not connected to the UK’s departure from the EU,” the spokesman said.

In an interview with Reuters, Unilever’s chief financial officer implied that it was not clear yet whether Unilever would remain part of the FTSE 100 benchmark index of the UK’s largest publicly listed companies after the move.

If Unilever were to drop out of that index, shares could fall as a result of some investors being forced to sell their holdings.

“We will continue with the premium listing in the UK, which means the full UK corporate governance requirements will apply to the company,” Chief Financial Officer Graeme Pitkethly told the agency.

“What we can’t determine is index inclusion; index inclusion is different to your listing. Because of confidentiality we haven’t yet engaged with the index providers and it is up to the index providers to determine who is in their listing or not in their listing.”

Shares in Unilever ended the day down 1.7 per cent on the London Stock Exchange.

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