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Unilever's Dutch shareholders back proposed unification

Mon 21 September 2020 12:59 | A A A

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(Sharecast News) - Unilever's Dutch shareholders have voted to end the company's historic dual-structure in favour of a single entity based in London.

The motion was passed at a virtual extraordinary shareholder meeting in with 99.39% of vote. If British shareholders also back the proposal at the UK's virtual EGM on 12 October, the business will press ahead with unification, which is currently scheduled for 22 November.

The dual-structure was created 90 years ago when Lever Brothers merged with Holland's Margarine Unie. However, Unilever - which owns Dove, Surf, Hellman's and Ben & Jerry's, among a raft of other brands - believes the structure is outdated and too complex, and that simplifying it will give it more flexibility, especially regarding equity-based acquisitions and disposals mergers.

"Unification will put us on a level playing field with other companies and ensure that we are best positioned for future success," said chief financial officer Graeme Pitkethly.

The unification will be achieved via a cross-border merger, where all of the assets, liabilities and legal relationships of Unilever NV will be acquired by Unilever PLC. The Dutch company will then cease to exist, with the UK entity issuing shares to former NV stockholders on a 1:1 basis.

In a note, Barclays said: "The benefits [of unification] include increasing [Unilever's] strategic flexibility for bolder portfolio change, modernising its 90-year-old legal structure and strengthening corporate governance."

As at 1345 BST, Unilever's London-listed shares were down 2% at 4,648.3p.

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