Posted by Geoff Bishop.
Written by Kevin Scott.
Unilever House in London will no longer be a legal headquarters for the consumer goods giant.
UNILEVER has confirmed that it has chosen Rotterdam over London as its legal headquarters, but claimed that Brexit is not a factor in its decision.
The decision will come as a major blow to Theresa May’s government as it attempts to uphold the country’s status as a centre for business after its departure from the European Union.
Ken Odeluga, an analyst at City Index, said: “It’s difficult to pretend political filters were entirely absent from management’s thought process.”
However, Unilever executives claimed that the move has “nothing to do with Brexit,” and chairman Marjin Dekkers noted that as a result of operational restructuring two of its three divisions would now be headquartered in London.
The decision is nevertheless a setback for the Conservatives as Mrs May and her ministers work to convince businesses not to move staff to the EU.
The Government has come under fire for failing to provide assurances to businesses mulling their post-Brexit futures, particularly in light of plans to leave the EU single market.
Mr Odeluga added that while the decision would have a low impact in terms of jobs and investment, “that will not prevent Brexit opponents of all political colours seizing on it as an example of Britain’s incrementally declining business status.”
Unilever, the company behind brands including Dove, Marmite and Hellman’s, said only a “minimal” number of people would move from London to Rotterdam.
The Press Association said it had been reported that Government officials met with Unilever to express concern, but failed to convince them of the benefits of basing its main offices in the UK.
A Government spokesman said: “As the company itself has made clear, 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.”
Unilever had been undertaking a review of its structure since it rebuffed a £115 billion hostile takeover attempt by rival Kraft Heinz last year.
The group currently has legal headquarters in both the UK and The Netherlands, an arrangement which can be traced back to its formation in 1930. The Dutch company has always had 55 per cent of the combined share capital. Unilever said in a statement said that its 7,300 workers the UK and 3,100 in The Netherlands will be unaffected.
Under its new structure the business will bring the two legal entities together into a single business incorporated in Rotterdam.
Unilever said the move would create a “simpler, more agile and more focused company”.
As part of the changes, Unilever will also restructure into three divisions: beauty and personal care, and home care will be based in the UK, while foods and refreshment will be based in the Netherlands.
Chairman Marjin Dekkers, said: “Our decision to headquarter the divisions in the UK and the Netherlands underscores our long-term commitment to both countries. The changes announced today also further strengthen Unilever’s corporate governance, creating for the first time in our history a ‘one share, one vote’ principle for all our shareholders.”
The company will continue to be listed in London, Amsterdam and New York.
Unliever’s strategic review concluded that a single holding company would bring greater simplicity and more flexibility to make changes in its portfolio through acquisitions or de-mergers.
“While we do not currently plan any major portfolio change, we believe it is appropriate to create a corporate structure that provides the group with the strategic flexibility and optionality to do so,” it said.
Proposals are expected to be placed before shareholders in the autumn with implementation anticipated towards the end of the year.