Unilever’s London-base move approved by UK shareholders

Unilever’s British shareholders have voted overwhelmingly in favour of unifying the company’s headquarters in the UK, moving the company’s plan to end dual nationality a step closer to completion.

Over 99% of investors in the British arm voted in favour of the move at a shareholder meeting on Monday, matching an earlier approval rate by Dutch investors.

The decision advances a plan to streamline a cumbersome structure that has complicated major takeovers and disposals such as Unilever’s strategic review of its tea business after selling its spreads unit and acquiring consumer health brands in South Asia from GlaxoSmithKline Plc.

The move to a single headquarters has created speculation that Unilever would advance its merger-and-acquisition activity as the move will allow Unilever’s plans to shift its portfolio into higher-growth markets like premium beauty. The consumer goods giant said this will become even more of a focus due to the Coronavirus pandemic.

The final steps towards completing the unification include UK High Court hearings on 23 October, and 2 November with the Dutch-listed shares ceasing trading after 27 November.

Although, Unilever’s streamlining plan still faces a potential obstacle in the form of  departure or ‘exit’ tax proposed by the Dutch opposition Green Party, that said it could cost the company up to €11 billion ($13 billion).

The tax proposal would breach European Union laws on freedom of establishment and free movement of capital, and would contravene the UK-Netherlands tax treaty.

The probability that Unilever’s Dutch and British share classes will be unified has fallen to 65%-75% from 80%-90%, Barclays analysts said in a note, citing the Green Party’s determination to hold a vote on the tax.

In August, the company confirmed it expected to finish the switch to one corporate and legal HQ over a weekend in November.

The personal care giant initially announced its intentions in June, less than two years after it was forced into a U-turn on a previous proposal to switch its HQ from London to Rotterdam in 2018.

Unilever said at the time of the June announcement that its “strong presence in both the Netherlands and the United Kingdom will remain unchanged”, with no plans for staffing, operations or activities to be affected.

The move will mean the end of a dual Anglo-Dutch structure that has been in place since 1930, with London becoming the single site for its legal and corporate HQs.

The move will also see the firm have its primary stock market listing in London, with a secondary listing in the Netherlands and the US.

Unilever currently employs approximately 6,000 people in the UK and 2,500 in the Netherlands.