The Government has dismissed any suggestion that Unilever’s decision to abandon its UK headquarters is connected to Brexit.
The company, behind top consumer brands including Marmite and Persil, confirmed a move to Rotterdam on Thursday morning.
The announcement was made less than 24 hours after Sky News reported the decision was to be finalised by the boards of its current dual British and Dutch holding companies.
Under the changes, which Unilever said would result in no job losses among its 7,300 UK staff, the two holding companies would become a “single legal entity incorporated in the Netherlands”.
It began to ponder the shake-up after fighting off a £115bn takeover approach by US rival Kraft just over a year ago.
Dutch laws provide stronger defences against unwanted bid interest.
It also moved to dismiss any speculation of Brexit being a factor by explaining that shares in its current Dutch business accounted for the majority of its share capital.
Nevertheless, the shift abroad will be seen as a major blow to the Government as it tries to calm nerves in the business community about Britain’s decision to leave the EU.
Unilever said London would continue to play a major future role because it was to make the city the headquarters for its Beauty and Personal Care and Home divisions – two of three to be created under the shake-up.
The company explained that the decision cemented almost £1bn of continued annual spending in the UK, including research and development work.
It said Unilever shares would continue to be listed in London, as well as in Amsterdam and the US, though it would no longer be eligible for inclusion in the FTSE 100 index because its domicile would be outside the UK.
Chairman Marijn Dekkers said: “Unilever’s board is fully committed to delivering long-term performance and sustainable value for shareholders.
“The board believes the move to three divisions and the simplification of our corporate structure will create a simpler, more agile and more focused company with increased strategic flexibility for value-creating portfolio change.
“Our decision to headquarter the divisions in the UK and the Netherlands underscores our long-term commitment to both countries.
“The changes announced today also further strengthen Unilever’s corporate governance, creating for the first time in our history a ‘one share, one vote’ principle for all our shareholders.”
The Government sought to play down the significance of the shake-up.
A spokesperson said: “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, safeguarding 7,300 jobs and £1bn a year of investment.
“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.”
But Rajesh Agrawal, London’s deputy mayor for business, said the move was “clearly disappointing” for the capital.
He added: “It brings into sharp focus the need for the Government to secure a Brexit deal that secures London as Europe’s leading business centre.
“The best way to do this is for London and the UK to remain part of the Single Market and Customs Union.”
From – SkyNews