Unilever Shareholders Pass Unification Plan Ending An Era For The Company

The old dual-headed structure of Unilever, which has been in existence for the last 90 years, will now be converted to a single London-based headquarters after the shareholders of the Anglo-Dutch consumer goods company approved of the change.

The company said that more than 90 per cent of the shareholders supported the change.

The shareholder meetings, which were streamed online because of the Covid-19 pandemic, were used by the company to announce the results of the voting.   

Last month, more than 99.4 per cent of the investors of the Dutch-listed Unilever approved the move.

The hybrid structure of the company dates back to the merger of British soap maker Lever Brothers and Margarine Unie in the Netherlands and now Unilever wants to implement the move on November 29.

The ability of the company to conduct acquisitions and asset sales fast, such as the planned sale of its tea business, is hampered by the dual structure, says the maker of Dove soap, Hellmann’s mayonnaise and Ben & Jerry’s ice cream.

The flexibility that it would acquire by the change of structure will now allow the company to fulfill its ambition to focus more on growing portfolio comprising of higher-growth areas such as premium beauty. This change in focus assumes much greater importance because of the pandemic, Unilever has also said.

UK High Court hearings on October 23 and November 2 are part of the final steps towards completing the unification. The company said that after November 17, its Dutch-listed shares will cease trading.

An “exit tax” proposed by a Dutch opposition party which could cost the company up to €11 billion is the only potential worry for Unilever’s completing this move.

The current plan appeared at odds with fundamental principles of law, said a top Dutch legal body said on Friday to the media. Even though there is no scheduled date for a debate in parliament on the new proposed law, its proposal has been resubmitted with amendments by the opposition party consideration.

While saying that it does not think the law is viable, Unilever has said that it would be a reason to stop it if the law is passed prior to the finalization of the unification.

After a failed $143 billion takeover approach by Kraft Heinz in 2017, Unilever began its push to restructure under previous management.

Its first attempt to unify in Rotterdam was thwarted by tax and political considerations because of concerns about a 15 per cent Dutch dividend withholding tax and concerns over forced selling of shares held by some UK shareholders once Unilever stopped trading at Britain’s FTSE 100 index.

Shares of Unilever Plc will be included in the Dutch AEX index under the current plan.

There is also some extra urgency on the part of Unilever because of the impending departure of Britain from the European Union as a delay could mean additional scrutiny from EU and British regulators

(Adapted from RTE.ie)

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