Unilever ends its dual legal status, abandons Netherlands for the UK

Unilever

Anglo-Dutch foods conglomerate, Unilever PLC, said it has decided to collapse legal structure into a single holding company based in Britain.

This is coming less than two years after the company’s shareholders decided to jettison the idea.

Unilever said in a statement that:

“Increasing Unilever’s strategic flexibility for portfolio evolution, including through equity-based acquisitions or demergers. Such flexibility is even more important as we anticipate the increasingly dynamic business environment that the Covid-19 pandemic will create.”

“Removing complexity and further strengthening Unilever’s corporate governance, creating for the first time an equal voting basis per share for all shareholders. Upon completion, there would be one market capitalisation, one class of shares and one global pool of liquidity, whilst maintaining the Group’s listings on the Amsterdam, London and New York stock exchanges,” the company said in a statement.

“The ongoing strategic review of Unilever’s tea business has further demonstrated that the dual-headed legal structure can create disadvantages for the Group. For example, a demerger of the tea business is one potential outcome of the review and, as was previously the case with the disposal of the company’s Spreads business, this would be significantly more challenging under the current legal structure than under a single parent structure.”

“It is also 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.”

“The Board considers unification under Unilever PLC as the best practical option to achieve this goal. This will be implemented through a cross-border merger between Unilever PLC and Unilever NV. Unilever NV shareholders will receive one new Unilever PLC share in exchange for each Unilever NV share held.”

“The proposed changes do not impact the underlying economic interests of any shareholder and, for the first time, investors will share exactly the same legal, ownership, dividend, governance and capital distribution rights in a single parent company. The Board expects Unilever to retain indexation in both the AEX and the FTSE UK Index Series.”