Speculation was mounting from February that the multinational would ditch its London headquarters in favor of having one head office in Rotterdam, as Britain edged closer to leaving the European Union. In March, Unilever simplified its corporate structure and snubbed the UK by opting for the Netherlands. It was considered one of the most pivotal moments in Unilever’s long history.
But that’s all changed now that the Unilever Board has decided to withdraw its proposal to simplify Unilever’s dual-headed legal structure, but for how long?
The notion that Unilever would ditch the UK headquarters in the wake of Brexit and concentrate on Rotterdam instead has now been shelved with Unilever recently announcing that it will remain co-headquartered in London and Rotterdam.
A move out of the UK would have removed Unilever from the FTSE 100 index and relocation could have led to British investors being forced to sell their shares.
Unilever had consulted with shareholders and said it received widespread support for the principle behind simplification. However, the proposal had not received support from a “significant group of shareholders” and Unilever, therefore, considered it appropriate to withdraw.
Questions are now being raised about whether this is an embarrassing climb-down on proposals for a single head office in the Netherlands or that it just makes business sense in the medium term.
“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 accelerate value creation further and serve the best long-term interests of Unilever,” says Marijn Dekkers, Chairman.
“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.”
