(Reuters) – Unilever proposed collapsing its Anglo-Dutch legal structure into a single holding company based in Britain on Thursday, nearly two years after shareholders sank an earlier plan to move its headquarters to the Netherlands.
The maker of Dove soap and Hellmann’s mayonnaise said in a statement that unification, which would unwind a dual-headed structure in place since 1930, aims to give more flexibility for mergers and acquisitions and reduce complexity.
Its latest plan is the reverse of what it proposed in 2018, a move which was ultimately dropped in the face of a disruptive UK shareholder revolt at Unilever, which has since replaced its Dutch chairman and chief executive.
At the time of the 2018 proposal to incorporate the combined entity in the Netherlands, Unilever was still reeling from an unexpected $143 billion take-over approach from Kraft Heinz (KHC.O), which was dropped after swift rejection from Unilever.
The new plan, which requires 50% shareholder approval versus 75% before, is the “best tactical option,” Unilever’s Danish Chairman Nils Andersen told reporters.
It resulted from an 18-month review and was accelerated in part by a decision to demerge its tea business, Unilever said, adding that this would be harder under its existing structure.
However, Unilever cautioned that the tea review was still underway, and that no deal was imminent.
The unification would be achieved through a cross-border merger, with shareholders of Dutch Unilever NV (UNA.AS) getting one share of British Unilever Plc (ULVR.L) for each share held.
“It makes sense for the company to have as flexible an operational structure as possible, and this appears to achieve it without any obvious downside,” Steve Clayton, UK fund manager of the Hargreaves Lansdown Select Fund range, which own Unilever shares, said of the proposal.
Shares in Unilever Plc were down 0.6% at 4349 pence, erasing earlier gains, while the Dutch shares were up 1.1%.
Unilever, which will remain listed on the Amsterdam and London stock exchanges, also said it will not change its British or Dutch operations, locations, activities or staffing.
The move was welcomed by Britain’s business minister Alok Sharma, who said it represented “a vote of confidence” in the country, which this year left the European Union.
- Factbox: Unilever's bid to end Anglo-Dutch dual-headed structure
But while Unilever promised to raise investment in the Netherlands and continue to base its Foods and Refreshment (F&R) division headquarters there, there was Dutch disappointment.
“We regret this proposal as we would rather have seen a simplification with a Dutch company at the head,” Economy Minister Eric Wiebes wrote to parliament.
Unilever’s F&R division, which represents about 40% of group sales or 20 billion euros ($23 billion) annually, is behind brands such as Knorr soup and Magnum ice-cream.
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