EXCLUSIVE: Unilever to move HQ to Rotterdam (but don’t believe those who will blame Brexit)

EXCLUSIVE: Unilever to move HQ to Rotterdam (but don’t believe those who will blame Brexit)

Ever since a takeover approach by Kraft Heinz last year, corporate giant Unilever has been considering which of its current joint headquarters – offices in London and Rotterdam – it will select to be its principal base.

And a well-placed source has revealed to BrexitCentral that the decision will be announced later this week – most likely Thursday – that Rotterdam has won out over London.

The move will doubtless spawn a chorus of anti-Brexit figures to claim that it comes as a direct result of the UK’s decision to leave the EU. But the truth is that a range of other factors have been at work.

Helpfully, many of these were set out in an article in the Financial Times last month, which also pointed out that Dutch Prime Minister, Mark Rutte, did in fact formerly work for Unilever:

Mr Rutte took the political risk and attracted protests by pushing through plans to make the country more attractive to overseas companies. He scrapped a 15 per cent tax on dividends, so that overseas investors in Dutch companies are no longer penalised, and plans to lower corporation tax… Dutch rules give more protection against unwelcome takeovers and take a broader view of the interests of stakeholders than in the UK. They require company boards to consider the effect of a bid on jobs and not focus solely on shareholders. The country also allows “stichtings” — legal entities that can protect the independence of companies.

I am informed that it is the stronger anti-hostile takeover protection offered in the Netherlands in particular that has dominated the decision to adopt Rotterdam as its sole headquarters. It follows nearly a century of the company being awkwardly jointly-headquartered across London and Rotterdam – following the merger in 1929 of Dutch margarine producer, Margarine Unie, with British soap maker, Lever Brothers – which created a complex legal and accounting structure.

The company is responsible for producing a range of well-known brands from cleaning products such as Persil and Domestos to Ben & Jerry’s and Cornetto ice cream as well as other household names such as Marmite, Flora and Vaseline – a full list can be found here.

The FT report last month also suggested that whichever location Unilever selected for its headquarters, the number of job losses “will not be large in the context of the global business”.

Since the EU referendum, numerous firms have continued to back London for global or European headquarters. HSBC gave its backing to the British capital after the Brexit vote – having earlier considered moving to New York or Hong Kong – while film giant Warner Bros has also chosen to keep its European HQ in the UK. Meanwhile, Deutsche Bank have made a 25-year commitment to a new London base and Michael Bloomberg said he was not concerned about “shifts in the political winds” as he opened his eponymous company’s £1 billion European HQ in the City last October.

Unilever’s decision comes on the back of a string of positive UK exports statistics released last week by the Office for National Statistics. They showed UK exports rising 11.5% to £625.9 billion in the past year, with service exports up 10.1% and goods exports up 12.6%.

The ONS described “strong manufacturing figures” as “leading the way in making the biggest contribution to growth”, as the UK manufacturing sector recorded its ninth consecutive month of growth – the longest stint of uninterrupted expansion since records began in 1968 – with International Trade Secretary Liam Fox hailing a “period of unprecedented economic opportunity” for the UK.

The UK’s trade deficit also shrank by £12.8 billion from £41.6 billion to £28.8 billion, a fall of over 30% in a year, as goods exports rose in all four constituent parts of the UK, including a 19.2% rise in Scotland.

Unilever did not respond to our invitation to comment.

Photocredit: James Stringer