Unilever (LON:ULVR) has chosen Rotterdam over London for its single corporate base, the consumer goods giant has said. The move is part of the group’s efforts to simplify its structure as it looks to unlock more value for shareholders in the wake of Kraft Heinz’s failed takeover bid.
Unilever’s share price has fallen into the red this morning, having given up 0.66 percent to 3,795.25p as of 08:24 GMT, and underperforming the broader UK market, with the benchmark FTSE 100 index having climbed marginally into positive territory and currently standing 0.17 percent higher at 7,144.61 points. The group’s shares have lost more than five percent of their value over the past year, as compared with about a three-percent dip in the Footsie.
Unilever unveils transformation plans
Unilever announced in a statement this morning that it was proposing to simplify its corporate structure from two legal entities, N.V. and PLC, into a single legal entity incorporated in the Netherlands. The company explained that the move reflected the fact that the shares in N.V. account for approximately 55 percent of the group’s combined ordinary share capital and traded with greater liquidity.
The Times meanwhile noted that market sources speculated that the decision to move to Rotterdam could also have been influenced by the greater protection afforded to companies by the Dutch government in the face of hostile takeover approaches.
The consumer goods giant further unveiled plans to base its structure on three divisions – Beauty & Personal Care, Home Care, and Foods & Refreshment – which the company expects to be more empowered, with greater responsibility for making long-term strategic choices and managing financial performance.
FTSE 100 spot to be determined
While Unilever noted that the group will continue to be listed in London, Amsterdam and New York, the group’s chief financial officer Graeme Pitkethly told Reuters in an interview that the company’s continued inclusion in the FTSE 100 index still had to be determined.
“We will continue with the premium listing in the UK, which means the full UK corporate governance requirements will apply to the company,” he pointed out. “What we can’t determine is index inclusion; index inclusion is different to your listing. Because of confidentiality we haven’t yet engaged with the index providers and it is up to the index providers to determine who is in their listing or not in their listing.”