NETHERLANDS – Unilever, a transnational consumer goods company, has announced that it would make Rotterdam, the Netherlands its sole headquarters, dealing a symbolic blow to Britain as it negotiates its exit from the European Union.
For nearly 90 years, the consumer products giant has straddled the North Sea, maintaining headquarters in London and in the Netherlands.
According to the NewYork Times, investors have pushed Unilever for years, however, to eliminate the dual structure, arguing that doing so would make the company more agile and better able to pursue mergers.
Unilever said last year that it would review its legal structure after Kraft Heinz briefly flirted with a US$143 billion takeover of the company.
That review has been complicated, though, by Britain’s planned withdrawal from the European Union, known as Brexit, and fears that the company’s decision could be politicized.
Critics of Brexit have argued that leaving the European Union could stifle Britain’s economy, particularly if companies who have used London as a European base decide to move some or all of their operations to the Continent in order to stay within the bloc’s customs rules.
British government officials had lobbied hard to persuade Unilever to maintain its London headquarters, in the hopes of avoiding the symbolic blow of a major company being seen to “leave” the country at a delicate time in its negotiations with European Union officials.
However, Unilever officials said that Brexit did not factor into the company’s decision.
“The proposed simplification will provide greater flexibility for strategic portfolio change and help drive long-term performance,” Unilever said in a statement.
It said that it would continue to be listed in London, Amsterdam and New York, and that two of its three new divisions would remain based in London: beauty and personal care, and home care.
The third division would be located in Rotterdam.
Unilever employs about 7,300 people in Britain and 3,100 in the Netherlands; none are expected to be affected by the structural change.
The company also said it would continue to spend 1 billion pounds, or about US$1.4 billion, a year in Britain, including on research and development.
Despite the company’s insistence that it would keep its presence in the British capital, Rajesh Agrawal, the London deputy mayor for business, said the decision was “clearly disappointing news” for the city.
“It brings into sharp focus the need for the government to secure a Brexit deal that secures London as Europe’s leading business center,” Mr. Agrawal added.
Unilever’s two headquarters mirrored its legal structure, in which the company maintained separate stock listings and corporate entities in both countries after its formation by the combination of the British soap maker Lever Brothers and the Dutch margarine producer Margarine Unie in 1930.
According to Mr. Polman, Unilever had originally hoped to make a decision on its structure by the end of last year, but later decided to delay it amid rising tensions in the negotiations between Britain and the European Union.
He also told BBC that the leaders of the first two divisions were being brought to the UK from the US and Singapore, “and related to that, there will be transfers of jobs as well.”
“Unilever has today shown its long-term commitment to the UK by choosing to locate its two fastest-growing global business divisions in this country.
As the company itself has made clear, its decision to transfer a small number of jobs to a corporate HQ in the Netherlands is part of a long-term restructuring of the company and is not connected to the UK’s departure from the EU,” said a government spokesman.