Unilever scraps Dutch relocation plan

MarmiteImage copyright

Unilever, which makes Marmite and Dove soap, has scrapped its plan to move its headquarters to the Netherlands after growing criticism from investors.

The firm has headquarters in both London and Rotterdam, but announced in March that it planned to have just one HQ located in the Dutch city.

But investors said the move could force UK shareholders to sell their shares.

Unilever said it recognised “the proposal has not received support from a significant group of shareholders”.

However, chairman Marijn Dekkers said that the board continued to believe that simplifying Unilever’s Anglo-Dutch structure was in the firm’s best interests.

“The board will now consider its next steps and will continue to engage with our shareholders,” the company said in a statement.

Unilever’s current dual-headed structure has existed since 1930, when Dutch margarine firm Unie merged with British soap maker Lever Brothers.

It is one of the biggest firms in the UK’s FTSE 100 share index, valued at about £124bn.

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Jerritt Clark/Getty Images

Image caption

Ben Jerry’s ice cream is one of Unilever’s brands

The company – which also makes Pot Noodle and Ben Jerry’s ice cream – will keep its listing on the London Stock Exchange.

Under UK rules it would not have been eligible to be a member of the FTSE 100 had the proposed change gone through.

This had concerned investors in the company, who were worried the change could spark a sell-off and drive down the share price.

When Unilever first unveiled its plan in March, some had speculated that it was making the move because of Brexit – claims the firm denied.


Simon Jack, BBC business editor

Unilever’s proposal to move its corporate headquarters and primary listing to the Netherlands had the appeal of one of its most famous products – Marmite.

Some shareholders loved it but a significant number hated it.

For those that bought the shares because of Unilever’s inclusion in the FTSE 100 it was very off-putting indeed.

Unilever’s move would have meant ejection from a globally significant index which many funds track by buying all of its members.

Thus it would have made many of them forced sellers at a time not of their choosing.

The proposed move was a reaction to the hostile but short-lived takeover bid from Kraft Heinz, and was never about Brexit.

But significant shareholder resistance highlights the power of London’s capital markets and the cachet of its leading index. Global shareholders like global companies listed on a global index.

A significant number of Unilever shareholders are saying that means staying in London – that does have post-Brexit significance.

  • Read Simon’s analysis in full

Board changes?

One of the shareholders who had expressed discontent, and who did not want to be named, told the BBC they would now expect to see a “sea change” at board level with non-executive directors leaving.

Aviva Investors said it was “pleased” with Unilever’s decision to withdraw its proposal.

Last month, Aviva Investors’ chief investment officer for equities David Cumming told the BBC the move could force UK shareholders to sell their shares and offered “no upside”.

He said Unilever was looking for “protection” after a failed takeover bid by US food giant Kraft Heinz in 2017.

Royal London Asset Management said it welcomed the decision. Earlier this week, the firm’s head of equities, Peter Rutter, had told the BBC that Unilever’s proposal would not benefit its UK clients and that Royal London was going to vote against it.

Rebecca O’Keeffe, head of investment at Interactive Investor, said that the backlash from both institutional and retail investors “meant that the writing was on the wall” for Unilever’s plan.

Thousands of Interactive Investor customers hold Unilever shares, Ms O’Keeffe said, with “hundreds of millions invested”.