Legal & General vows to vote against Unilever’s planned Dutch move

The consumer goods giant wants to move because Dutch laws offer more comprehensive protections against hostile takeovers

Legal & General, one of Europe’s largest asset managers, will be voting against Unilever’s “Marmite” plan to shut up shop in Britain and move to the Netherlands.

The British-Dutch consumer goods giant, which is known for owning hundreds of brands including Dove, Ben & Jerry’s and Knorr, announced its intentions to leave the UK earlier this year, with the aim of unifying its corporate structure with a single HQ in Rotterdam.

L&G explained their rather unusual step of declaring their voting intention weeks ahead of Unilever’s shareholder meeting next month by citing “significant client enquiries” about the company’s plans to move away from London.

Sacha Sadan, director of corporate governance at Legal & General Investment Management (LGIM), said: “We do not believe Unilever has made a compelling case for many PLC shareholders to support the recommendation in favour of Dutch incorporation. Therefore, we intend to vote against Unilever’s proposed resolution.”

Unilever, which has been based in Britain for almost a century, reviewed its dual-headed corporate structure in the aftermath of an attempted $143bn takeover from Kraft Heinz last year, as Dutch laws offer more comprehensive protections against hostile takeovers. Bosses have since tried to convince investors that their proposed Dutch incorporation will “create a simpler, more agile and more focused company”.

Unilever needs at least 75 per cent of votes of London-listed shareholders in order to get the green light for an exodus from the capital.

Mr Sadan added: “As a supportive shareholder in Unilever for more than 25 years, we have engaged with the company on a number of issues including its decision to unify its corporate structure. We asked the company to ensure that any approach they take safeguards the ability of our clients to maintain their investment and benefit from Unilever’s continued success.”

LGIM’s decision to vote against the relocation plans of the UK’s third largest company mirrors the opposition expressed by other shareholders, including Brewin Dolphin, Lindsell Train and Columbia Threadneedle.

Nicla Di Palma, equity analyst at Brewin Dolphin, said: “We aren’t convinced that the move will realise tangible benefits for shareholders and plan to vote against.”