In what has been described as a major blow to the UK government, Unilever (LON:ULVR) have this morning announced their decision to base their new headquarters in Rotterdam, not London. Despite the Anglo-Dutch consumers goods giant stating that this was not about Brexit, anti-Brexit campaigners are already suggesting this is at least in part down to the UK’s decision to leave the bloc and warning that it could be a worrying sign of things to come.
Decision based on economics not politics
Whilst it is tempting to politicise this decision as a clear and obvious example of waning confidence in post-Brexit Britain, that would be remiss, with the simple facts being that it is purely business based - as the firm was at pains to point out in their announcement. The reasoning seems pretty logical given that the Dutch business currently represents 55% of the group’s overall share capital and that the shares listed in the Netherlands are more liquid.
Shares expected to drop out of the FTSE 100
Unilever is currently listed in London, Amsterdam and New York and is the third largest share on the FTSE 100 with a market cap of £105B. The decision to move to a single legal entity based in the Netherlands, from the current corporate structure which is split between Rotterdam and London, means some jobs may ultimately move across the North Sea, although this will likely be a handful of senior posts rather than a large proportion of 7,300 UK-based employees. Barring a special exemption the firm will likely disappear from the blue-chip index even if it chooses to maintain a listing on the LSE.