Unilever's shareholders overwhelmingly back London move

Unilever shareholders in the Netherlands have given their overwhelming backing to plans to move the Anglo-Dutch company into one London-based entity, enormously simplifying the company's corporate structure.

More than 99% of the FTSE 100 company's investors in its Dutch arm voted to have the whole group based in London. The decision reverses a stalled attempt two years ago to house the business in the Netherlands. 

If the move to London is successful, it would spell the end of the business' dual structure that has been in place for over 90 years, following the merger between Unie, a Dutch margarine company, and the British soap manufacturer Lever Brothers.

Barriers still remain to the unification plan, however. The company's UK shareholders also need to signal their approval, with a vote scheduled for October 12.

Also, there is growing support for a new law in the Netherlands that would slap billions in exit taxes on multinationals with revenues of more than €750 million leaving the country, which would also scupper the relocation plans. 

The company has set a unification target date of November 22. 

Unilever, whose brands include Dove soap, Marmite and Ben & Jerry's ice cream, has said that a successful move to simplify the corporate structure would make equity-based acquisitions or disposals quicker and easier.

Past disposals, such as the sale of Unilever’s spreads division, have been complicated by the need to unwind complex internal structures resulting from the dual domicile.

The company said last month that if the proposed Dutch tax legislation, which was designed to penalise large companies leaving the country for lower-tax jurisdictions, becomes law, it would reconsider the plans to relocate to London.

The proposed bill has been given the nickname "Hotel California" in reference to The Eagles' song, which features the lyric “you can check out any time you like, but you can never leave” and if it is passed into law, it could cost Unilever as much as €11 billion.

Tax has long played a role in Unilever’s attempts to simplify its corporate structure. The Dutch government tried to woo the group by scrapping a dividend tax on big companies, but retreated after a public backlash in 2018.

Unilever dropped its plans to consolidate its structure into a Rotterdam-based company two years ago, following pressure from shareholders. Its new idea to move to a London-based company was hailed by the UK government as a “vote of confidence” when first announced in June.

Unilever’s share price fell almost 2% on Monday afternoon.

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