Unilever abandons its consolidation plan in the Netherlands after the shareholders' uprising

This reversal represents a surprise capitulation for outgoing CEO Paul Polman, who made the effort to consolidate his swan song at Unilever. After postponing an unsolicited bid from his American rival

Kraft Heinz
Co.

Mr. Polman and the Board undertook a strategic review that a single structure would make it more flexible.

However, in recent weeks, large institutional investors have publicly announced that they will oppose this plan during a shareholder vote later this month, raising the issue of whether Unilever could get enough support.

Unilever announced Friday that it would withdraw its proposal after acknowledging that it did not receive support from a large group of shareholders.

The company said that being a single entity would facilitate the conclusion of agreements and act quickly. But the move would have cost the company its place in the UK FTSE 100, forcing some funds with specific mandates to sell.

Critics had argued that the benefits of the plan were unclear, that there was uncertainty about Dutch dividend taxes and that this decision could have set a bad precedent as the UK was preparing to leave the UK. 'European Union.

Major investors, including Aviva, M & G,

Legal and general
,

Schroders, Lindsell Train, Columbia Threadneedle and Royal London Asset Management, which together hold about 10% of Unilever's capital, have all announced their intention to vote "no".

The proposal also angered some private shareholders, who were likely to play a disproportionate role in the vote because of a rule requiring a "yes" vote of more than 50% of voters, regardless of their importance. This would have given an owner or a single share the same voice as a major investor.

Unilever had made great efforts to rally its shareholders in recent weeks as public opposition mounted.

The president of the company wrote an editorial for a major British newspaper, his chief financial officer participated in a high-profile BBC radio show and the company published one-page ads in the mainstream press.

On Friday, the company said it still thought that simplifying its structure would be the best long-term solution and that it would now consider the next steps and engage in a dialogue with shareholders. It also announced its intention to cancel its Dutch preferred shares.

Unilever has long operated as two separate listed entities – Unilever PLC in the UK and Unilever NV in the Netherlands – with a group of managers and group directors.

In March he had announced the merger of the dualist structure created in 1929 by the merger of Lever Bros., an English soap maker, and Margarine Unie, a Dutch margarine producer.

Unilever chose the Netherlands before the UK for its base, as it argued that the Dutch entity was larger and that these shares were trading with greater liquidity. He said the move was not related to Brexit.

– Saabira Chaudhuri contributed to this article.

Corrections & Amplifications
The shares of Unilever would have always been traded in London after its proposal for consolidation. An earlier version of this article incorrectly stated that it would have been removed from the list in London. (October 5, 2018)