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‘Toothless takeover laws’

Unilever’s HQ move choice based on UK’s weak laws
Ryan Fletcher, Friday, March 16th, 2018


Unilever’s decision to pick the Netherlands over Britain for its headquarters was based in part on the UK’s “toothless takeover laws”, Unite has learned.

 

The consumer goods giant, which has legal headquarters in both the UK and Holland, announced yesterday (March 15) that it will be merging the two bases into one Dutch-based entity.

 

The company, listed on both the UK and Dutch stock exchanges, said the decision was taken because 55 per cent of its total shares are based in the Netherlands, where there is more share liquidity.

 

However, Unite understands that a motivating factor in choosing Rotterdam over London was because of the Netherlands’ stronger takeover laws.

 

Last year, Unilever narrowly fended off a hostile takeover bid from Heinz.

 

Unlike the UK, Dutch corporate laws allow Netherlands-incorporated companies to adopt ‎’poison pill’ defences to thwart hostile takeovers by asset stripping vulture capitalists.

 

They also mean that workforce, national and social interests are taken into account rather than just shareholder interest.

 

‘Damning indictment’

Unite national officer for Unilever Rhys McCarthy said, “Unilever’s headquarter move to Rotterdam is a damning indictment on the UK’s toothless takeover laws which leave decent employers fighting predatory takeovers by vulture capitalists with one hand tied behind their back.”

 

Unilever’s Rotterdam move comes amid Melrose’s debt-laden takeover bid for GKN which if successful will see £1.4bn of debt loaded onto the manufacturing company. Unite is fearful that Melrose will sell parts of the company off piecemeal to the highest bidder resulting in UK jobs being axed and shipped overseas.

 

Unite, along with politicians from across the political divide, is demanding that the business secretary Greg Clark intervenes and blocks the Melrose bid.

 

McCarthy called on the government to improve the UK’s takeover laws to prevent similar situations happening in future.

 

“Theresa May has talked about toughening up rules to stop aggressive asset-stripping takeovers, but done little to nothing. Her continued inaction could lead to more companies like Unilever fleeing overseas and decent UK employers falling prey to vulture capitalists against the national interest,” he said.

 

‘Toughen up’

“We need to toughen up UK takeover rules to support long term growth and stop workforce, national and social interests being sacrificed on the altar of short-term asset-stripers.”

 

Unilever insisted its 7,300 UK employees will not be affected by the change in headquarters, saying that a separate move to split its business into three divisions, with two operating from London and the third from the Netherlands, demonstrated its long term commitment “to both countries”.

 

McCarthy added, “Unite will be in dialogue with Unilever over the coming days to secure assurances on UK jobs.”

 

 

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