Unilever NV has received approval from its shareholders to proceed with its plan to unify its dual corporate structure and establish a London-based entity. The proposal, which received an overwhelming 99.39% vote in favor, was announced during an online extraordinary shareholder meeting held in the Netherlands. This move by Unilever is part of its strategy to streamline its operations and increase flexibility.

The unification process is set to be completed on November 22, ending the company’s 90-year hybrid status since the merger of Lever Brothers and Margarine Unie. However, the plan still requires the approval of investors in Unilever’s UK counterpart, Unilever Plc. The final vote on the plan is scheduled for October 12.

Unilever aims to overcome the limitations of its current dual structure, which hampers its ability to conduct acquisitions and disposals swiftly. By unifying its corporate structure, the company believes it will be better positioned to navigate the changing market dynamics and focus on high-growth sectors such as premium beauty. The COVID-19 pandemic has highlighted the importance of adapting quickly to market shifts, further emphasizing the need for this structural change.

Graeme Pitkethly, Unilever’s Chief Financial Officer, expressed confidence that the unification will level the playing field for the company and set it up for future success. The decision to pursue restructuring came after an unsuccessful takeover attempt by Kraft Heinz in 2017, prompting Unilever to explore ways to enhance its operational efficiency. Previous attempts to unify in Rotterdam faced obstacles due to tax and political considerations, including concerns over dividend withholding tax and potential forced selling by UK shareholders.

Under the current plan, Unilever Plc shares will be included in the Dutch AEX index. The impending deadline for Britain’s departure from the European Union adds urgency to complete the unification process, as any delay beyond this year could result in increased scrutiny from EU and British regulators. Despite a proposal from a Dutch opposition party to implement an “exit tax” if Unilever leaves the Netherlands, Unilever’s Chief Executive, Alan Jope, remains committed to the unification plans. Jope believes such a tax would violate international law and stated that Unilever could cancel the merger if the law were to be passed.

Overall, Unilever’s move to unify its dual-headed corporate structure signals its commitment to adapt and thrive in the rapidly changing business landscape. The completion of the unification process will enable the company to pursue its strategic objectives more efficiently while addressing potential regulatory challenges.

Useful 2 Links:
1. Unilever press release: One Unilever unification proposal receives strong support from shareholders
2. The Wall Street Journal: Unilever Shareholders Back Dual-Structure Overhaul, Showdown Ahead