UN Unilever NV

By Ian Walker

Anglo-Dutch consumer products company Unilever PLC (ULVR.LN) said Thursday that it will combine its two legal entities--NV and PLC--into a single holding company incorporated in the Netherlands, dealing a blow to British Prime Minister Theresa May's government as it negotiates the country's exit from the European Union.

Unilever, which houses the Ben & Jerry's, Dove and Hellmann's brands among its portfolio, said it will focus on three main divisions: beauty & personal care, home care, and foods & refreshment.

The headquarters of the beauty & personal care and the home care divisions will be in London, while foods & refreshment will continue to be based in the Dutch sity of Rotterdam, the company said.

Unilever said that none of its employees will be affected by the changes. It currently has 7,300 staff in the U.K. and 3,100 in the Netherlands.

As part of the unification, the company will seek a premium listing on the London Stock Exchange, and listings on Euronext in Amsterdam and on the New York Stock Exchange.

Under the plan Unilever expects to issue one new NV share for each NV and PLC share held. Proposals are expected to be put to shareholders for approval around the end of the third quarter of this year, with completion toward the end of this year.

The current structure--essentially a combination of a British and a Dutch operating company, each with their own shares--has been in place since Lever Brothers, an English soap maker, and Dutch margarine producer Margarine Unie agreed to join forces in 1929. The structure has evolved since then, but the company continues to operate like separate legal entities fused under a group-wide set of senior managers and directors. Unilever's current head offices are split between London and Rotterdam.

Apart from making mergers-and-acquisitions easier, moving to a single share class would also eliminate certain administrative burdens. Board members must currently attend back-to-back shareholder meetings in London and Rotterdam once a year.

The move to Rotterdam also offers higher protection to hostile takeovers than the U.K.

Saabira Chaudhuri contributed to this article.

Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749

(END) Dow Jones Newswires

March 15, 2018 03:48 ET (07:48 GMT)

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