Peter-Vincent Schuld

There has been quite a lot of buzz around the food, cleaning and personal care products group Unilever this year.
Unilever, which has headquarters in both Rotterdam (Unilever NV) and London (Unilever Plc), announced that it will soon make a decision from which it will definitively manage its global business activities. This will either be London or Rotterdam.
The decision was expected one of these days, but Unilever announced that it needed more time to come to a careful decision.

It is a fact that “dividend tax”, which in the UK is 0% for large companies with many foreign shareholders, is a thorn in the side of large companies and their shareholders. The business climate for head offices of foreign multinational companies stands or falls with a favourable tax regime. Seen in this light, the decision of the new Dutch government to abolish the dividend tax, the rate of which is 15%, is understandable. It is in the interest of the Netherlands to retain its registered office in the Netherlands, whether or not they are original Dutch companies.

There’s more going on at Unilever. The imminent Brexit, the withdrawal of the United Kingdom from the European Union, will also play a role in the final decision to be taken. Unilever’s management is also looking at the conditions and agreements on which Great Britain and the EU will say goodbye to each other.

Unilever, what kind of company was that? It all started with Messrs. Van der Bergh and Jurgens, both margarine manufacturers who were each other’s competitors. They merged to form the Margarine Union. Then, in 1930, the Margarine Unie merged with the British Lever Brothers, a soap manufacturer. The company developed into a global conglomerate of products that we all use in our households on a daily basis.
From Lipton tea to Unox smoked sausage, from Glorix toilet cleaner to Dove skin care products. You really can’t take a step at home or abroad without coming across Unilever products. Whether you want to eat ice cream, enrich your food with a flavor or turn on the dishwasher. Unilever enters your life as easily as the door lock of your home that you open and close every day. Of course, from the perspective of the Unilever company, this is quite an achievement.

It is, of course, of the utmost importance for the Netherlands that a company with its roots in Dutch society should continue to be established on Dutch territory.

Of course, Unilever today is a different company than it was decades ago. Of course, we retain our need for cleaning and food products. Over the years, Unilever has taken numerous decisions and measures to improve its net result. Many years ago, Unilever said goodbye to its brand Igloo with the popular fish fingers. In 2011, she withdrew the product Knorr Vie from the market in the Netherlands, a drink consisting of fruit and vegetables. Disappointing sales results and the recession at the time forced Unilever to withdraw the product from its range. As early as 1983, Unilever divested its production of candles. The production and sale of the famous Gouda Candles was sold to Bolsius, which continued the production from Gouda in Waddinxveen. The production of other stearin, oleic, and glycerin, but Unilever-Emery, later known as Unichema was sold to ICI in 1997.

Unilever touched consumers and investors alike with a number of remarkable events.
Earlier this year, Unilever announced that it wanted to sell its margarine brands, the product that started it all. Unilever started looking for a buyer for Becel, Blue Band and Bona, among others. Unilever wanted to become more profitable again and the divestment of margarine sales and production would contribute to this, according to Unilever. According to the group, growth in the margarine market was no longer possible.
A striking fact, now that the margarine brand Becel and its cholesterol-lowering ingredients are increasingly being promoted through health insurers and doctors.

“But everything that comes on the bread is not yet a good topping,” Unilever must have thought when it sold its South African “spreads” (sandwich toppings -ed) to the South African investment fund Remgro this year. The total transaction in favour of Unilever amounted to approximately 737 million euros converted from South African rand to euros. Unilever was paid this partly in cash and partly in Remgro shares.
The sale of this branch of Unilever in South Africa was partly motivated by the limited profitability of Unilever’s “food” branch there.

For a while this year, it looked as if Unilever itself would fall prey to a takeover. The American group Kraft-Heinz made an offer of a total of around 130 billion euros. Kraft is known for its cheese spread “Philadelphia” and Heinz is known for its tomato ketchup with which it gained name and fame. However, these are only two brands from the broad brand portfolio of the American company that is majority-owned by American billionaire Warren Buffet and Brazilian investment company 3G, which is owned by Swiss-Brazilian Jorge Paolo Lemann, among others.

The proposal was firmly rejected by Unilever’s board of directors. Unilever did not see any benefits in the offer, neither for the shareholders nor for the company itself. Unilever was of the opinion that the offer was far below the actual value of the company. Unilever has always steered its own course and this time too, Unilever did not seem to want to go along with the series of mergers and acquisitions. that were playing out elsewhere in the business world. If the takeover had actually taken place, it would not have been inconceivable that the group would have had to endure a substantial restructuring period. Certainly, investment company 3G has built a reputation as a cool remediation company.

Nevertheless, Unilever itself is also taking drastic measures. For example, Unilever decided to sell its sausage and soup factory in Oss to the meat canning company Zwanenberg, which is also active in the production of vegetarian products and snacks. Unilever Zwanenberg will produce the famous smoked sausages, soups, but also pasta sauces that will be sold under the name Bertolli.
Zwanenberg intends to increase the capacity of the new plant by around 18,000 tonnes.
The takeover of the factory by Zwanenberg took some doing. Unions and staff were not at all satisfied with Unilever’s sales plans. The staff went on strike several times. In the end, the unions reached an agreement with Unilever on the conditions under which the staff at Unilever will be made redundant and transferred to Zwanenberg.

We now have to wait for what Unilever will decide on the final location of its headquarters.