Unilever, the Anglo-Dutch maker of Ben and Jerry’s ice cream, Marmite and Dove soap is set to combine its businesses into one UK-based merger, in an unexpected move.
Photo: Unilever
This comes two years after the two giants attempted to merge into a single Dutch company back in 2018.
The plans were put on hold following protests from their British shareholders, causing them to rethink their plan of action for the future, with many also linking the plan with the continued uncertainty around Brexit.
Unilever assured shareholders and the public that no jobs would be lost in the move and that its existing headquarters in Britain and the Netherlands would remain.
Sophie Lund-Yates, an analyst and stockbroker at Hargreaves Lansdown, said: “It’s a big departure from the failed plans of 2018 when the group sought a single listing in Amsterdam.
“Unilever’s sales have been lacklustre of late, and the pursuit of a single listing is Unilever’s way of making sure it’s in the best possible shape to start the difficult process of rejuvenation.”
She added the big question was to whether or not Dutch shareholders would attempt to choke the plans similarly to the in which their British counterparts did with the original plan.
There are currently two firms independently listed in London and Amsterdam with slightly more shares being held by the company based in the Netherlands.
The situation eventually led to plans to fully integrate the two entities into a fully-Dutch company. This move was interpreted by some as an attempt to avoid the negative consequences of Brexit, a stance the company whole-heartedly denied.
The Brexit connection was made in light of news of several banks and other companies making plans to moving their businesses to mainland Europe after fears that they would lose access to the EU’s single market.
The new structure will make the company legally simpler. It will only convene in London, whereas before it would alternate between its two bases, in a move it says will create a “simpler company with greater strategic flexibility.”
In a press release, the company wrote: “[It is] clear that the Covid-19 pandemic will create a business environment in which having as much flexibility and responsiveness as possible will be critically important.”
It also added that its “strong presence” in The Netherlands and United Kingdom will remain unchanged with no modifications to its operations in both regions.
Nils Anderson, the chairman of Unilever, said: “We remain committed to The Netherlands and the UK and there will be no change to Unilever’s footprint in either country as a result of the proposed change to Unilever’s legal parent structure.
“We are confident that unification will help Unilever deliver its vision of driving superior long-term performance through its multiple stakeholder business model.”
Unilever has been under pressure for years to simplify its structure.
Shareholders feared its complexity made it unattractive to other potential shareholders, and also didn’t allow it to shed poorly-performing sectors, costing the company significant funds to operate.
The new parent company will be Unilever PLC, and the Dutch arm of the company will be absorbed into its British counterpart. However, it remains to be seen how the Dutch government will react to this plan.
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