Unilever unifies corporate structure under UK plc but retains dual listing and Dutch operations

Unilever has opted to go ahead and unify its legal structure under a single London-headquartered entity, but giant FMCG will retain its operations and listing in the Netherlands.

Mayonnaise owner Hellmann’s said its food and refreshments division, which generates 40% of its revenue, will remain based in Rotterdam, along with its research and development unit. The home care, beauty and personal care divisions will continue to be located in the UK.

Unilever has been owned through two separately listed companies, a Dutch NV and a British plc, since its inception in 1930, but has operated as a single business unit through “complex arrangements between plc and NV to maintain the parity between the economic rights of the respective shareholders”. , he said in a document filed with the London Stock Exchange today (June 11).

The company has in the past reviewed its corporate structure and taken a number of steps towards unification, most recently in June 2019 when Unilever ended its certificate of deposit structure. And in 2017, the Dutch division bought back preferred shares from shareholders. He chose to withdraw a proposal in 2018 to unify the business under a new Dutch holding company.

“Although the group received broad support for the principle of unification, the board concluded that certain aspects of the proposed arrangements should be reconsidered,” Unilever said today.

Unilever said the merger will be implemented through a cross-border merger between Unilever plc and Unilever NV, whereby shareholders in the Netherlands will receive one new plc share in exchange for each Dutch share. There will be no impact on the company’s workers, he said.

“For the first time, investors will share exactly the same legal, ownership, dividend, governance and capital distribution rights in a single parent company,” Unilever added. “The board expects Unilever to retain indexing in both the AEX and the FTSE UK index series.”

Chairman Nils Andersen said: “The Unilever Board believes that unifying the company’s legal structure will create greater strategic flexibility, remove complexity and further improve governance. We remain committed to the Netherlands and the UK and there will be no change to Unilever’s presence in these two countries following the proposed change to Unilever’s parent legal structure. We believe the unification will help Unilever achieve its vision of superior long-term performance through its multi-stakeholder business model.

Unilever said the legal combination will provide the benefit of “strategic flexibility for portfolio evolution”, which may include acquisitions or “spin-offs”. This decision will also help to reduce the complexity of the company, with equal rights for both groups of shareholders.

“When completed, there would be one market capitalization, one share class and a global pool of liquidity, while maintaining the group’s listings on the Amsterdam, London and New York stock exchanges,” he said. he declares.

The company said the new legal structure will also provide greater flexibility to respond to the coronavirus crisis.

And he also hinted at the possible split of his food and refreshments division into an independent business.

“With the flexibility offered by the unification, the Dutch government also asked for reassurance that if Unilever were ever to choose to list the Foods & Refreshment division as an independent business, it would be incorporated and listed on the Netherlands,” the company said. “The Netherlands is an attractive corporate headquarters and as long as it continues to be, Unilever is comfortable making these commitments given the division’s already strong presence in the Netherlands.”

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