11th Jun 2020 08:23
(Alliance News) - Anglo-Dutch consumer good manufacturer Unilever PLC said Thursday it intends to restructure itself by moving from a dual-headed legal structure to a single parent company.
The group will unified under Unilever PLC, which 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.
Unilever will remain listed in London, Amsterdam, and New York, and the legal restructuring will not affect its operations, staffing levels or the manufacture and supply of products in both countries, the company emphasised.
The decision to form a single parent company stems from an ongoing strategic review of Unilever's tea business, which demonstrated the dual-headed legal structure can create disadvantages for the group, it said.
In particular, a demerger of the tea business is a potential outcome of the review, and under the current legal structure would be a more daunting prospect, the company noted.
Unilever believes that having a single parent company would increase its strategic flexibility for developing its portfolio, including through equity-based acquisitions or demergers.
Back in October 2018, the group had withdrawn a proposal to simplify under a Dutch entity and move its headquarters to Rotterdam from London, after the plan drew opposition from its UK shareholders. The stock would have dropped out of the FTSE 100 index, forcing index funds to sell.
The new restructuring plan is subject to shareholder approval, consultations with employee representative bodies and other regulatory consents, Unilever said.
Unilever has not given a date for the general meeting which will propose the resolution, but said it expects implementation of the legal unification to take place towards the end of 2020.
"Unilever's board believes that unifying the company's legal structure will create greater strategic flexibility, remove complexity and further improve governance. 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," said Chair Nils Andersen.
Addressing the political sensitivities of its decision to pick the UK over the Netherlands this time, Unilever said: "Agri-foods is an important sector in The Netherlands. With the flexibility that unification provides, the Dutch government has also asked for reassurance that if Unilever should ever choose to list the Foods & Refreshment Division as an independent company, it would be incorporated and listed in The Netherlands.
"The Netherlands is an attractive headquarter location for business and provided it continues to be as such, Unilever is comfortable to make these commitments given the Division's already strong Dutch presence."
The Foods & Refreshment division will continue to be headquartered in Rotterdam, Unilever said, while the Beauty & Personal Care and Home Care businesses will continue to be headquartered in London.
Shares in Unilever were up 1.1% at 4,426.00 pence early Thursday in London.
By Dayo Laniyan; [email protected]
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