What's going on?
Anglo-Dutch consumer goods giant Unilever revealed on Thursday that it would merge its currently separate British and Dutch businesses into one legal entity headquartered in the Netherlands. The firm says it doesn’t have anything to do with Brexit…
What does this mean?
Unilever, which makes everything from Ben & Jerry’s to Vaseline, has long had two separate HQs in the UK and the Netherlands. That’s thanks in part to the company’s history: Unilever was created in 1930 after Dutch margarine company Unie joined forces with British soap maker Lever Brothers (geddit?).
As part of a wider restructuring within the company, however, Unilever will consolidate to one official headquarters in Rotterdam later this year. According to management, having a single legal identity will leave Unilever freer to make acquisitions in the future and help give shareholders a greater say in how the company is run. Unilever will also be moving some jobs into the UK – which it says proves that Brexit played no role in the decision.
Why should I care?
For markets: Unilever’s reorganization is designed with shareholders in mind.
Unilever’s been under pressure ever since Warren Buffett’s Kraft Heinz briefly attempted a takeover of the firm in early 2017 (it would have been one of the biggest corporate deals ever). By moving fully to the Netherlands, Dutch law will take precedence in the event that another company tries it on – and Dutch law makes it far easier to refuse a deal. Effectively, Unilever is strengthening its defense mechanism (which isn’t necessarily good for shareholders).
The bigger picture: Unilever might be an exception, but Brexit is having logistical consequences.
While Unilever’s choice of a European home may be unrelated, a number of international companies are moving some of their European operations from the UK because of Brexit. Many of those are financial services firms who are keeping offices in London, but moving their brass plates to an EU member state so that they can keep providing services throughout the bloc (known as ”passporting”).