Unilever will not leave the UK after all

Unilever dropped plans to leave the UK for a single seat in the Netherlands after its shareholders rebelled, tormenting Paul Polman's chief executive's plan to reorganize the company through a deal.

The turnaround follows growing opposition from fund managers Columbia Threadneedle, Legal & General Investment Management, Schroders and other companies, who were forced to sell their Unilever shares when the company abandoned stock market indexes. British reference. The company's shares listed in the UK lost up to 1% Friday morning.

"It's a bit humiliating – or at least humiliating – for CEO Paul Polman, and this could speed up his retirement from the company," Investec analyst Eddy Hargreaves said in e-mail comments. The manufacturer of Ben & Jerry's Dove ice cream and soap has already begun to look for a successor to the leader, who is Dutch and has held the position of CEO since 2009.

Unilever (ul) said in March that a new Dutch base would give it more flexibility to "undertake major mergers and acquisitions", using stock or selling shares of the company. Like other consumer goods giants, the company is struggling with the slow growth of some of its major brands, which also include Lipton tea and Ax deodorant.

The decision confers on Prime Minister Theresa May a much needed political victory as she tries to curb the exodus of companies after the vote on Brexit. While the company had insisted that the move was not related to the UK's plan to leave the European Union and would not significantly affect employment, the The planned departure was a symbolically significant coup to May's vision of a post-Brexit economy turned to the outside. Unilever operates in 190 countries and has maintained its dual headquarters since its inception in 1930, following the merger of Margarine Unie (Netherlands) and British soap maker Lever Brothers.

Mayor's Tweet

"Despite the government's appalling management of Brexit negotiations, the capital will still be one of the best cities in the world to do business," London Mayor Sadiq Khan, a Labor Party member, said on Twitter. opposition.

Leaving the London headquarters would almost certainly have eliminated Unilever's membership in the UK benchmark indices. This posed a problem for UK investment funds, which would have been forced to sell their assets, thus risking controversy between Unilever and compensation for potential losses. Shareholders had to vote on the plan at the end of the month.

"There was no serious reason to choose the Netherlands over Britain," said Robert Lloyd, fund manager at Blue Whale Capital, in comments sent via email. "London has a free and open market and is a leading financial center since the 19th century."

The move to a single Dutch base could have offered Unilever increased protection against takeovers, after the company rejected the unwanted approach of Kraft Heinz Co. last year.

Consolidation under one roof was intended to provide the company with strategic flexibility to undertake major stock transactions, or to divest part of its business, said CFO Graeme Pitkethly last month. A withdrawal from the plan could mean that big deals are on hold until the company details its next steps, said Deborah Aitken, an analyst at Bloomberg Intelligence, in a note.

Opposition of shareholder

Despite Unilever's efforts to rally support for the plan, investors representing 10% or more of the outstanding shares of the company have pledged to vote against this proposal, with new names joining the dissidents almost daily in recent weeks .

"We acknowledge that the proposal has not received the support of a large group of shareholders and therefore believe that it should be withdrawn," the company said in a statement.