Unilever plans to combine its UK and Dutch arms in a single British parent, reversing a previous plan to consolidate in the Netherlands.
The owner of Dove soap and Ben & Jerry’s ice cream said the move would boost flexibility for stock-based acquisitions and divestments, and the company said the COVID-19 pandemic is making that more important.
The move represents a shift by chief executive officer Alan Jope from the approach of his predecessor, Paul Polman, who championed the previous consolidation plan.
The plan to consolidate in the Netherlands was abandoned two years ago in the face of fierce opposition from UK shareholders.
The latest shift will prompt speculation that Unilever plans to split its food and household-product arms into an independent company.
The company said it promised the Dutch government that if it would ever do so, that business would be incorporated and listed in the Netherlands.
Eliminating dual legal structures would result in one class of shares and a single pool of liquidity, Unilever said.
The consolidation is to be implemented through a cross-border merger between Unilever PLC and Unilever NV — the respective British and Dutch arms.
The revised plan follows an 18-month strategic review, the company said.
Unilever NV shareholders would receive one new Unilever PLC share in exchange for each share held, the company said.
Unilever plans to maintain listings in Amsterdam, London and New York. The previous plan failed in part because it would have resulted in the company’s ejection from the UK’s benchmark stock index, creating problems for institutional investors.
A separate review of Unilever’s tea business has demonstrated that the dual-headed legal structure can create disadvantages, it said.
The organizational streamlining would not affect staffing levels or business activities in either country, it said.
The headquarters of Unilever’s foods and refreshment division, which represents about 40 percent of the company’s sales, would continue to be based in Rotterdam, and the home care and beauty and personal care divisions would continue to be headquartered in the UK.
“With the flexibility that unification provides, the Dutch government has also asked for reassurance that if Unilever should ever choose to list the foods & refreshment division as an independent company, it would be incorporated and listed in the Netherlands,” Unilever said in a statement. “The Netherlands is an attractive headquarter location for business and provided it continues to be as such, Unilever is comfortable to make these commitments.”
The company has maintained dual nationality since 1930.
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