Unilever sticks with dual listing

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Unilever is to keep its dual structure, including separate listings in London and Rotterdam, after a review found that a single entity would have tax consequences for investors and the company.

Antony Burgmans, chairman, said: “Unitary structures did not have compelling benefits.”

The decision comes after Unilever replaced its dual chairman/chief executive structure with a single executive and disappointed investors looking for changes.

“Change is not as powerful an engine within the company as they might have you believe,” said a fund manager at an institutional investor with Unilever stock.

John McMillin, analyst at Prudential Equity Group, said the move to a single listing could have added momentum to the “slow-moving” company, which has struggled to compete with food producers Nestlé and Danone.

Investors said a dual stock listing made it more difficult for the company to undertake stock buy-backs and raise money for acquisitions.

However, Unilever said that moving to a single listing would have been disruptive and that it would have made it more difficult for the company to arbitrage its corporate tax liabilities between the UK and the Netherlands. It said investors would also be affected. UK taxpayers receive tax credits on UK-sourced dividends and Dutch shareholders can reclaim or avoid withholding tax on Dutch-sourced dividends.

Mr Burgmans said the current structure gave investors the flexibility to choose between stock in different currencies and that it complemented Unilever’s organisation. “The whole culture of Unilever is shaped around the culture of multiculturalism,” he said. Patrick Cescau, Unilever’s chief executive, said the current structure did not affect his ability to run the business.

He said: “Performance is what matters – not the niceties of the corporate structure.”

Unilever said that it considered all options, including moving to a non-European stock listing, but found “no compelling advantage” in adopting other structures.

The company is making some changes, including changing the way it allocates assets between Unilever plc and Unilever NV. Assets are currently divided on a regional basis, with Unilever plc receiving assets from the old British Empire. It is also splitting NV shares and consolidating plc shares to give them an equivalent value, and will allow all shareholders to nominate board candidates.

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