Unilever, the third largest company in the UK, has pulled out of plans to quit the UK and move its headquarters to the Netherlands.
The Anglo-Dutch consumer goods giant, which owns the brands Marmite and Dove, were unable to persuade investors that a move was the correct decision. Now, on departure of the EU, Britain will retain the brand – which is valued at £124billion and supplies 7,000 British jobs.
— The Telegraph (@Telegraph) October 5, 2018
Investors – including asset management firm Shroders – had previously warned that such a move could force a rush of stock sales, subsequently leading to major losses for the company. Additionally, concerns were circulated that the implications of falling off the FTSE 100 would be serious. Other investors showing unease over this option included Aviva Investors, Columbia Threadneedle, L&G, M&G and Royal London.
In a statement, Unilever said: “We have had an extensive period of engagement with shareholders and have received widespread support for the principle behind simplification. However, we recognise that the proposal has not received support from a significant group of shareholders and therefore consider it appropriate to withdraw.”
— Quattro Ltd (@QuattroDM) October 5, 2018
Whilst Brexit has generating warnings of economic downturn, the decision is boost of confidence for UK shareholders – reiterating the dominance of London as a hub of financial services.
Gerard Lyons, chief economic strategist at Netwealth Investments, stated: “First and foremost it’s a positive reflection on the City of London, the fact that investors wanted Unilever to remain in the FTSE 100- it shows London is still the financial centre of Europe.”