Marmite maker Unilever axes move from UK to Netherlands

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Consumer giant Unilever, owner of iconic brands like Marmite and Dove soap, on Friday ditched its post-Brexit plan to move its main headquarters from London to Rotterdam after a revolt by shareholders.

The Anglo-Dutch group, which also makes Ben and Jerry's ice cream, Persil washing powder and PG Tips tea, said it was scrapping a proposal that would have seen its corporate base move to the Netherlands.

"We recognise that the proposal has not received support from a significant group of shareholders and therefore consider it appropriate to withdraw," the company said in a statement.

The group had originally unveiled the planned switch in March in a symbolic decision that was largely interpreted by analysts as a blow to post-Brexit Britain.

It also followed a failed hostile bid by US rival Kraft Heinz last year, which analysts said played a key role in Unilever's decision as the Netherlands has stronger rules to protect companies against takeovers.

But Unilever had in recent weeks faced mounting opposition from key shareholders, including Aviva Investors, Royal London, Columbia Threadneedle, Legal & General Investment Management, Lindsell Train, M&G Investments and Brewin Dolphin.

Many were angry that the plan would have ended Unilever's dual listing on the London and Amsterdam stock exchanges, meaning that many would have had to sell shares in Britain.

- 'Great news' -

Chairman Marijn Dekkers left the door open for a move in the future, insisting on Friday that the board continued to believe simplifying Unilever's structure remains in the firm's best interests.

"The board will now consider its next steps and will continue to engage with our shareholders," Dekkers added.

Unilever was founded in 1930 after the Dutch margarine producer Margarien Unie merged with British soapmaker Lever Brothers.

For nearly a century since, Unilever has maintained a dual-headed structure and listings on the London, Amsterdam and New York stock exchanges.

Its sprawling range is home to other well-known products like Knorr soup and Magnum ice cream.

But in March, the company announced it was choosing The Netherlands over London to host its headquarters, dealing a blow to Britain's efforts to keep multinational companies following Brexit.

London mayor Sadiq Khan hailed Unilever's decision as "great news", adding that despite the British government's "appalling mishandling" of Brexit talks the capital was a world leader in business.

- 'Badly mismanaged' -

Analysts welcomed the decision but criticised Unilever's "very poor" handling of the issue.

Unilever's climbdown was "good news for UK plc", said Rebecca O'Keeffe of Interactive Investor, adding: "The vote had been its own version of Brexit and had not gone down well with its core UK investors."

The position of Unilever CEO Paul Polman was likely to face "severe scrutiny", AJ Bell investment director Russ Mould said. "The episode looks to have been badly mismanaged."

Han Smit, professor of corporate finance at Erasmus University in Rotterdam, told AFP there had been "so much opposition from shareholders" in Britain that they would have voted against the move.

Shifting Unilever's HQ would have forced investors to sell their British shares, while stronger takeover defences in the Netherlands could result in "less value creation for the company", he said.

Unilever has always insisted the move to Rotterdam was not related to Brexit and said its 7,300 workers in Britain and 3,100 in the Netherlands would not be affected.

Yet the row over the looming move had started to drag on the company's performance with Unilever in July reporting a drop in sales in the first half of 2018.

Unilever's announcement also comes as a blow to Dutch Prime Minister Mark Rutte, whose government has been angling for post-Brexit business from Britain.

Rutte faces opposition to a plan to scrap a dividend tax in a bid to attract international firms and cash in on Britain's departure from the EU.

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© 2018 AFP

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