PLC announced on Friday its plan to consolidate its UK and Dutch operating companies after encountering resistance from some of its largest investors.
According to the plan, the maker of Hellmann's mayonnaise and Ben & Jerry's ice cream would have ended its double-list structure and abandoned its London headquarters in favor of Rotterdam.
The reversal represents a surprising surrender for outgoing chief executive Paul Polman, who swung the consolidation efforts at Unilever. After the defense of an unsolicited offer from American rivals
Mr. Polman and the board began a strategic review that completed a single structure that would make it nimble.
In recent weeks, however, a parade of major institutional investors publicly said that they would later reject the plan on a shareholder vote. This month raises the question of whether Unilever can muster enough support.
On Friday, Unilever said he would withdraw the proposal after realizing that he was not supported by a significant group of shareholders.
The company had said that being a single entity would make it easier to do business and act quickly. But the move would have taken the company into the UK's FTSE 1
Critics had argued that the benefits of the plan were not clear, that the Dutch dividend was uncertain taxes and that the move could have set a bad precedent while the UK is ready to leave the European Union.
key investors, including Aviva, M & G,
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Schroders, Lindsell Train, Columbia Threadneedle and Royal London Asset Management, which together own around 10% of Unilever, said they would vote "no".
The proposal also angered some private shareholders who played an excessive role in voting for a rule requiring a "yes" of more than 50% of the votes, no matter how high their stake is. That would have given an owner or just one the same voice as a big investor.
Unilever had put a lot of pressure in recent weeks to win over shareholders as the public opposition rose.
The company chairman wrote a comment for a major British newspaper, his chief financial officer appeared in a high-profile BBC radio show, and the company published full-page ads in the mainstream press.
On Friday, the company said it still thought it would simplify its structure in the long run best and would now consider the next steps and engage with shareholders. In addition, the company announced that it would cancel its Dutch preference shares.
Unilever has long been operating as two separate publicly traded companies – Unilever PLC in the UK and Unilever NV in the Netherlands – with a group of managers and
In March, it was said to unite the dual structure of the merger by Lever Bros., an English soap maker from 1929, and Margarine Unie, a Dutch margarine manufacturer.
Unilever chose the Netherlands over the UK for its base because she said the Dutch company was larger and that these stocks would trade with greater liquidity. The movement is not connected to the Brexit.
-Saabira Chaudhuri contributed to this article.
Corrections & Amplifications
Unilever stock would have been traded in London after its proposed consolidation. An earlier version of this article falsely said that the company had been delisted in London. (October 5, 2018)