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Unilever opts for Rotterdam over London in head office shake-up
Unilever and the UK government have denied the consumer goods giant's decision to base its head office in the Netherlands is a vote of no-confidence in Brexit Britain.
The maker of Marmite, Dove and Persil has chosen to base its corporate headquarters in Rotterdam and not London when it combines its two classes of shares into a single entity. The company currently operates with two parent companies with head offices in London and Rotterdam.
Paul Polman, Unilever's chief executive, said the decision was taken for technical reasons and that it had nothing to do with Britain's decision to leave the EU. Critics of Brexit have said a decision in favour of Rotterdam would indicate Britain's weakened position outside the EU.
Polman told the BBC: "This is not about Brexit. Unilever is in 190 countries and most of these countries are not in the European Union. Both countries (the Netherlands and the UK) are very attractive from an investment point of view. We have a long history here that we are proud of and we are happy we can continue to build on that."
He said the board chose Rotterdam over London because the Dutch shares account for about 55% of the group's share capital and are more actively traded than the UK shares. Its shares will remain listed in London, Amsterdam and New York but Unilever, Britain's third-biggest company by market value, is likely to leave the FTSE 100 index.
Unilever, formed in 1930 by the merger of Dutch margarine producer Margarine Unie and British soapmaker Lever Brothers, will reorganise into three divisions. The beauty and personal care and home care operations will be based in London, securing almost £1bn a year of company spending. The food and refreshment division will operate from Rotterdam.
The UK has been preparing for the decision for some time as Unilever looked increasingly likely to choose Rotterdam. The government reiterated its message that Unilever was not influenced by Britain leaving the EU.
"Unilever has today shown its long-term commitment to the UK by choosing to locate its two fastest-growing global business division in this country," the business department said in a statement. "Its decision to transfer a small number of jobs to a corporate HQ in the Netherlands is part of a long-term restructuring plan of the company and is not connected to the UK's departure from the EU."
Polman said the operations to be based in the UK make up about 60% of Unilever's business, indicating there was no change to the company's commitment to Britain. "We would not be investing in our two headquarters here for the two divisions here in the UK and we would not have secured the £1bn of spending if that were the case."
He said a few jobs would move to Rotterdam from London but Unilever's employment of 7,300 people in the UK and 3,100 people in the Netherlands would be largely unaffected by the change. But the move is likely to cause political ructions in the UK as one of Britain's biggest companies favours an EU location with Brexit looming.
The corporate overhaul follows Unilever's thwarting of a $143bn (£102bn) takeover bid by Kraft Heinz in 2017. The aggressive approach highlighted the limited defences a UK company has against a foreign takeover and Polman is reported to have lobbied the UK for stronger measures to protect companies from overseas predators.
Polman told the BBC the Dutch and UK takeover laws were quite similar and that this was not a factor in Unilever's decision to choose Rotterdam.