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    Monday, October 12, 2020

    Unilever Headquarters Combination Cleared by U.K. Shareholders

    Shareholders in the U.K. arm of Unilever voted overwhelmingly in favor of unifying the company’s headquarters in the U.K., moving the Dove soap maker’s plan to end dual nationality a step closer to completion.

    More than 99% of investors in the British entity voted in favor of the move at a shareholder meeting Monday, matching an earlier approval rate by Dutch investors. The decision advances a plan to streamline a cumbersome structure that has complicated major takeovers and disposals.

    The owner of Knorr stock cubes and Axe shower gel has maintained twin bases since the 1930 merger of Margarine Unie of the Netherlands and U.K. soapmaker Lever Brothers. It began moving to unwind that structure after an unsolicited takeover approach from Kraft Heinz Co. in 2017.

    The move to a single headquarters has prompted speculation that Unilever would step up merger-and-acquisition activity. The company has mounted a strategic review of its tea business after selling its spreads unit and acquiring consumer health brands in South Asia from GlaxoSmithKline Plc.

    The vote hands a win to Chief Executive Officer Alan Jope after the company withdrew a proposal to unify its business in the Netherlands under his predecessor, Paul Polman. That reversal came after U.K. stockholders rebelled against the company’s potential exit from the FTSE 100 index.

    Unilever’s streamlining plan still faces a potential hurdle in the form of a so-called departure tax proposed by the Dutch opposition Green Party. The company has said the plan would make a move to London prohibitively expensive, but the legislation is in the early stages.

    The tax proposal would breach European Union laws on freedom of establishment and free movement of capital, and would contravene the U.K.-Netherlands tax treaty, Unilever has said.

    The probability that Unilever’s Dutch and British share classes will be unified has fallen to 65%-75% from 80%-90%, Barclays analysts said in a note, citing the Green Party’s determination to hold a vote on the tax.

    Unilever’s London-traded shares were little changed Monday afternoon.


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