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Unilever abandons plans to move HQ to Netherlands - business live Unilever abandons plans to move HQ to Netherlands - business live
(35 minutes later)
It’s US non-farm payrolls day, and investors await the figures as keenly as ever.
Economists polled by Reuters are predicting 185k for September, up from 204k last month.
Average earnings are expected to come in at 2.8%, a touch lower than last month’s 2.9%.
Rachel Reeves, Labour MP and chair of the Business, Energy and Industrial Strategy committee, makes the point that Unilever announced the plans to move its headquarters from London after fending off a takeover approach from America’s Kraft Heinz early last year:Rachel Reeves, Labour MP and chair of the Business, Energy and Industrial Strategy committee, makes the point that Unilever announced the plans to move its headquarters from London after fending off a takeover approach from America’s Kraft Heinz early last year:
Whatever the arguments made for incorporating into the Netherlands, there was a real suspicion that, in the wake of the hostile bid from Kraft Heinz, part of the motive for the move was that UK rules too easily allow takeovers.Whatever the arguments made for incorporating into the Netherlands, there was a real suspicion that, in the wake of the hostile bid from Kraft Heinz, part of the motive for the move was that UK rules too easily allow takeovers.
As a committee, we will want to consider looking at the government’s white paper on foreign takeovers to see whether the new regime should include additional safeguards.As a committee, we will want to consider looking at the government’s white paper on foreign takeovers to see whether the new regime should include additional safeguards.
BEIS committee chair Rachel Reeves in @standardcity . On Unilever HQ news:"There was a real suspicion that, in the wake of the hostile bid from Kraft Heinz, part of the motive for the move was that UK rules too easily allow takeovers"@RachelReevesMP https://t.co/fFyPaklicpBEIS committee chair Rachel Reeves in @standardcity . On Unilever HQ news:"There was a real suspicion that, in the wake of the hostile bid from Kraft Heinz, part of the motive for the move was that UK rules too easily allow takeovers"@RachelReevesMP https://t.co/fFyPaklicp
European markets are a sea of red this morning, as rising US bond yields, pressure on emerging markets, and Italy’s rising debts weigh on confidence.European markets are a sea of red this morning, as rising US bond yields, pressure on emerging markets, and Italy’s rising debts weigh on confidence.
FTSE 100: -0.6% at 7,375FTSE 100: -0.6% at 7,375
Germany’s DAX: -0.6% at 12,169Germany’s DAX: -0.6% at 12,169
France’s CAC: -0.4% at 5,387France’s CAC: -0.4% at 5,387
Italy’s FTSE MIB: -1% at 20,413Italy’s FTSE MIB: -1% at 20,413
Spain’s IBEX: -0.4% at 9,281Spain’s IBEX: -0.4% at 9,281
Europe’s STOXX 600: -0.5% at 378Europe’s STOXX 600: -0.5% at 378
David Madden, analyst at CMC Markets, says US bond yields could rise further - piling more pressure on emerging markets - if the non-farm payrolls report comes in stronger than expected at 1.30pm (BST):David Madden, analyst at CMC Markets, says US bond yields could rise further - piling more pressure on emerging markets - if the non-farm payrolls report comes in stronger than expected at 1.30pm (BST):
Stocks are firmly in the red as investors are worried about rising US government bond yields, emerging market economies, and Italy’s political situation. The rise in US yields could put additional pressure on emerging economies, and the US non-farm payrolls report later today could drive yields even higher if we see a positive update.Stocks are firmly in the red as investors are worried about rising US government bond yields, emerging market economies, and Italy’s political situation. The rise in US yields could put additional pressure on emerging economies, and the US non-farm payrolls report later today could drive yields even higher if we see a positive update.
The Italian government are holding their nerve and are determined to disobey Brussels, and pursue increased government spending in a bid to boost economic activity. The political rumbling regarding Italy might spark another round of the Italian debt crisis.The Italian government are holding their nerve and are determined to disobey Brussels, and pursue increased government spending in a bid to boost economic activity. The political rumbling regarding Italy might spark another round of the Italian debt crisis.
The business secretary, Greg Clark, gives his reaction to Unilever:The business secretary, Greg Clark, gives his reaction to Unilever:
A welcome decision by @Unilever board having listened to shareholders. HQ remaining builds on two of its three global businesses being based in the UK. Our Industrial Strategy commits us to always being an open & competitive economy & a great place to locate global headquarters.A welcome decision by @Unilever board having listened to shareholders. HQ remaining builds on two of its three global businesses being based in the UK. Our Industrial Strategy commits us to always being an open & competitive economy & a great place to locate global headquarters.
Interesting reference to the industrial strategy, which a year on from the announcement is still without the independent watchdog required to get it up and running:Interesting reference to the industrial strategy, which a year on from the announcement is still without the independent watchdog required to get it up and running:
Royal London Asset Management (which has 0.7% stake in Unilever, worth roughly £360m) was one of the public opponents to Unilever’s plans and has responded to the firm’s decision to scrap them:Royal London Asset Management (which has 0.7% stake in Unilever, worth roughly £360m) was one of the public opponents to Unilever’s plans and has responded to the firm’s decision to scrap them:
We welcome the decision the board of Unilever has taken. They have listened to shareholder concerns and responded in a constructive way.We welcome the decision the board of Unilever has taken. They have listened to shareholder concerns and responded in a constructive way.
As a high quality company with a talented management team, we are pleased we and other UK investors can now share in the future growth of the company. We look forward to continued engagement with Unilever on the next steps.As a high quality company with a talented management team, we are pleased we and other UK investors can now share in the future growth of the company. We look forward to continued engagement with Unilever on the next steps.
Russ Mould, investment director at AJ Bell, says Unilever’s decision to back track on plans to move its HQ to Rotterdam shows the power of institutional investors and puts pressure on the board.Russ Mould, investment director at AJ Bell, says Unilever’s decision to back track on plans to move its HQ to Rotterdam shows the power of institutional investors and puts pressure on the board.
Today’s climbdown from Unilever over a plan which would have necessitated its exit from the FTSE 100 is an example of the power institutional investors can wield when they act in concert with one another.Today’s climbdown from Unilever over a plan which would have necessitated its exit from the FTSE 100 is an example of the power institutional investors can wield when they act in concert with one another.
This brings into the question the credibility of Unilever’s insistence that the vast majority of shareholders were ‘fully supportive’ of its proposals ahead of the vote deadline in the UK and the Netherlands later this month.This brings into the question the credibility of Unilever’s insistence that the vast majority of shareholders were ‘fully supportive’ of its proposals ahead of the vote deadline in the UK and the Netherlands later this month.
Abandoning its dual UK-Dutch stock market listing and moving its HQ to Rotterdam would have made Unilever, one of the London market’s leading lights, ineligible for the FTSE and many institutions complained they would have been forced sellers of the shares.Abandoning its dual UK-Dutch stock market listing and moving its HQ to Rotterdam would have made Unilever, one of the London market’s leading lights, ineligible for the FTSE and many institutions complained they would have been forced sellers of the shares.
The episode looks to have been badly mis-managed and the position of chief executive Paul Polman and the rest of the board is likely to come under severe scrutiny.The episode looks to have been badly mis-managed and the position of chief executive Paul Polman and the rest of the board is likely to come under severe scrutiny.
The Investment Association, a trade body representing UK fund managers, says there was no reason for UK shareholders to vote in favour of Unilever’s move to Rotterdam, and has welcomed the firm’s decision to scrap the plans.The Investment Association, a trade body representing UK fund managers, says there was no reason for UK shareholders to vote in favour of Unilever’s move to Rotterdam, and has welcomed the firm’s decision to scrap the plans.
The feedback from many of our members has been that there was no compelling reason for Plc shareholders to accept the proposed simplification in this form. They did not believe it would be in the long-term interests of their clients, and would have resulted in many shareholders being forced to sell their shares.The feedback from many of our members has been that there was no compelling reason for Plc shareholders to accept the proposed simplification in this form. They did not believe it would be in the long-term interests of their clients, and would have resulted in many shareholders being forced to sell their shares.
We welcome the fact that Unilever has listened to the feedback from their shareholders and not pushed ahead with their plans. We look forward to engaging with the company on their future plans.We welcome the fact that Unilever has listened to the feedback from their shareholders and not pushed ahead with their plans. We look forward to engaging with the company on their future plans.
The Dutch employers organisation VNO-NCW is blaming Brexit for Unilever’s decision:The Dutch employers organisation VNO-NCW is blaming Brexit for Unilever’s decision:
The website DutchNews.nl quotes the organisation:The website DutchNews.nl quotes the organisation:
[We are sorry that] such an important decision has become swept up in the turbulent political developments in the UK.[We are sorry that] such an important decision has become swept up in the turbulent political developments in the UK.
It is also an indication of what Brexit means, a hard fight for corporate locations.It is also an indication of what Brexit means, a hard fight for corporate locations.
Unilever’s decision to keep its headquarters in London is a “huge blow” for the Dutch Prime Minister Mark Rutte and “a bit of a shocker.”Unilever’s decision to keep its headquarters in London is a “huge blow” for the Dutch Prime Minister Mark Rutte and “a bit of a shocker.”
Reaction from the Netherlands:Reaction from the Netherlands:
Unilever's decision to drop plans for a single base are "a bit of a shocker here in the Netherlands," Bloomberg's @JoostAkkermans2 says https://t.co/BsfTAMS7aK pic.twitter.com/nSzPGLGHsfUnilever's decision to drop plans for a single base are "a bit of a shocker here in the Netherlands," Bloomberg's @JoostAkkermans2 says https://t.co/BsfTAMS7aK pic.twitter.com/nSzPGLGHsf
The UK is happily celebrating Unilever’s decision to abandon plans to move its headquarters from London to Rotterdam.The UK is happily celebrating Unilever’s decision to abandon plans to move its headquarters from London to Rotterdam.
But the mood in the Netherlands is likely to be less cheery, particularly as Dutch Prime Minister Mark Rutte was working on plans to scrap a dividend tax in what was seen as a bid to attract Unilever.But the mood in the Netherlands is likely to be less cheery, particularly as Dutch Prime Minister Mark Rutte was working on plans to scrap a dividend tax in what was seen as a bid to attract Unilever.
Reuters has this report:Reuters has this report:
Unilever’s withdrawal of plans to move its headquarters to Rotterdam looked likely on Friday to trigger political fallout for Dutch Prime Minister Mark Rutte over his unpopular proposal to scrap a withholding tax on dividends.Unilever’s withdrawal of plans to move its headquarters to Rotterdam looked likely on Friday to trigger political fallout for Dutch Prime Minister Mark Rutte over his unpopular proposal to scrap a withholding tax on dividends.
Unilever said it had given up on moving to Rotterdam for now under pressure from shareholders at its British arm, who worried about the future tax treatment of Dutch dividends.Unilever said it had given up on moving to Rotterdam for now under pressure from shareholders at its British arm, who worried about the future tax treatment of Dutch dividends.
Rutte, who worked for Unilever from 1992-2002 before entering politics, had yet to respond to the news early on Friday.Rutte, who worked for Unilever from 1992-2002 before entering politics, had yet to respond to the news early on Friday.
But he will be bracing for a barrage of questions at his weekly press conference later in the day over whether the 15% dividend tax - earmarked for removal in theory to attract foreign investment - will now be retained after all.But he will be bracing for a barrage of questions at his weekly press conference later in the day over whether the 15% dividend tax - earmarked for removal in theory to attract foreign investment - will now be retained after all.
While doubts have grown in recent weeks among dual-listed Unilever investors over the wisdom of the move to a sole HQ in the Netherlands, Rutte has been fighting an increasingly lonely battle in favour of scrapping the tax.While doubts have grown in recent weeks among dual-listed Unilever investors over the wisdom of the move to a sole HQ in the Netherlands, Rutte has been fighting an increasingly lonely battle in favour of scrapping the tax.
Halifax is reporting a 1.4% fall in UK house prices in September, the sharpest monthly fall since April.Halifax is reporting a 1.4% fall in UK house prices in September, the sharpest monthly fall since April.
It followed a 0.2% fall in August, and defied expectations of a 0.2% rise.It followed a 0.2% fall in August, and defied expectations of a 0.2% rise.
The average price of a UK home was £225,995. On an annual basis, prices were 2.5% higher.The average price of a UK home was £225,995. On an annual basis, prices were 2.5% higher.
Samuel Tombs, chief UK economist at Pantheon Macroeconomic, cautions that Halifax’s house price index tends to be volatile.Samuel Tombs, chief UK economist at Pantheon Macroeconomic, cautions that Halifax’s house price index tends to be volatile.
Halifax’s data is very noisy, so we doubt September’s data signal that the Bank of England’s increase in Bank rate in August has pushed the housing market over the edge.Halifax’s data is very noisy, so we doubt September’s data signal that the Bank of England’s increase in Bank rate in August has pushed the housing market over the edge.
Sustained falls in house prices at a national level aren’t likely. Even so, the combination of rising mortgage rates and heightened economic uncertainty will weigh on demand over the next six months, ensuring that year-over-year growth in house prices barely exceeds zero.Sustained falls in house prices at a national level aren’t likely. Even so, the combination of rising mortgage rates and heightened economic uncertainty will weigh on demand over the next six months, ensuring that year-over-year growth in house prices barely exceeds zero.
The Mayor of London, Sadiq Khan, has welcomed Unilever’s decision to keep its headquarters in the capital city.The Mayor of London, Sadiq Khan, has welcomed Unilever’s decision to keep its headquarters in the capital city.
He says that despite Brexit, London will always be one of the best places to base a business.He says that despite Brexit, London will always be one of the best places to base a business.
It’s great news that Unilever has chosen to keep its HQ in London and abandoned plans to move it to Rotterdam.It’s great news that Unilever has chosen to keep its HQ in London and abandoned plans to move it to Rotterdam.
Despite Theresa May’s appalling mishandling of the Brexit negotiations, the capital will always be one of the best cities in the world in which to do business.Despite Theresa May’s appalling mishandling of the Brexit negotiations, the capital will always be one of the best cities in the world in which to do business.
As Unilever works out its “next steps”, it is not yet clear where the unravelled plans leave the company’s chairman and chief executive.As Unilever works out its “next steps”, it is not yet clear where the unravelled plans leave the company’s chairman and chief executive.
Having written quite a lot about this lately, there’s one obvious thing missing from this statement - the chairman’s resignation. https://t.co/it1MYYtl93Having written quite a lot about this lately, there’s one obvious thing missing from this statement - the chairman’s resignation. https://t.co/it1MYYtl93
Shares in Unilever have opened a touch higher, after the FTSE 100 company announced it would not press ahead with plans to abandon its dual listing.Shares in Unilever have opened a touch higher, after the FTSE 100 company announced it would not press ahead with plans to abandon its dual listing.
Its fair to say it’s a muted reaction, with shares now up just 0.1% at £40.78.Its fair to say it’s a muted reaction, with shares now up just 0.1% at £40.78.
The decision to abandon the plans for a move to Rotterdam will be a major blow to Unilever’s chief executive, Paul Polman, and the wider board.The decision to abandon the plans for a move to Rotterdam will be a major blow to Unilever’s chief executive, Paul Polman, and the wider board.
The plan was going to go to two polls - one in the Netherlands on 25 October, requiring the support of 50% of voting shareholders, and one in the UK on 26 October, requiring 75% support.The plan was going to go to two polls - one in the Netherlands on 25 October, requiring the support of 50% of voting shareholders, and one in the UK on 26 October, requiring 75% support.
The London vote was always going to be the tricky one.The London vote was always going to be the tricky one.
Unilever acknowledged the lack of support in their statement this morning:Unilever acknowledged the lack of support in their statement this morning:
We have had an extensive period of engagement with shareholders and have received widespread support for the principle behind simplification.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.However, we recognise that the proposal has not received support from a significant group of shareholders and therefore consider it appropriate to withdraw.
Unions had also come out against Unilever’s planned move, arguing that it was vital for the maker of Ben & Jerry’s ice cream and other companies to stay in the UK.Unions had also come out against Unilever’s planned move, arguing that it was vital for the maker of Ben & Jerry’s ice cream and other companies to stay in the UK.
Unite national officer Rhys McCarthy said:Unite national officer Rhys McCarthy said:
Investors understand the need for great British-based companies like Unilever to retain their headquarters in the UK.Investors understand the need for great British-based companies like Unilever to retain their headquarters in the UK.
The UK’s weak takeover rules which put short-termism ahead of the long term are clearly a major factor in Unilever’s proposed move following a failed hostile takeover bid, as is the swirling uncertainty around Brexit.The UK’s weak takeover rules which put short-termism ahead of the long term are clearly a major factor in Unilever’s proposed move following a failed hostile takeover bid, as is the swirling uncertainty around Brexit.
Ministers need to get a grip on Brexit and toughen takeover rules to stop more firms like Unilever seeking to flee overseas.Ministers need to get a grip on Brexit and toughen takeover rules to stop more firms like Unilever seeking to flee overseas.
A raft of shareholders had publicly come out in opposition to Unilever’s plan to abandon its dual governance structure and switch its headquarters from London to Rotterdam.A raft of shareholders had publicly come out in opposition to Unilever’s plan to abandon its dual governance structure and switch its headquarters from London to Rotterdam.
UK investors including Aviva Investors, Columbia Threadneedle, L&G, M&G, Royal London and Schroders had all stated they would vote against the plans.UK investors including Aviva Investors, Columbia Threadneedle, L&G, M&G, Royal London and Schroders had all stated they would vote against the plans.
One of the main points of opposition was that Unilever would likely be ejected from the FTSE 100 - having been an original constituent in 1984 - and the FSTE All-share.One of the main points of opposition was that Unilever would likely be ejected from the FTSE 100 - having been an original constituent in 1984 - and the FSTE All-share.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Breaking news: Unilever has abandoned plans to move its headquarters from London to Rotterdam, after finally bowing to investor pressure.Breaking news: Unilever has abandoned plans to move its headquarters from London to Rotterdam, after finally bowing to investor pressure.
It means the consumer giant will remain listed on the FTSE 100 – one of the most contentious points in its planned move.It means the consumer giant will remain listed on the FTSE 100 – one of the most contentious points in its planned move.
Announcing the decision, which will be a major blow for the board, Unilever’s chairman Marijn Dekkers, said they will now consider the “next steps”.Announcing the decision, which will be a major blow for the board, Unilever’s chairman Marijn Dekkers, said they will now consider the “next steps”.
Unilever has built a long track record of consistent and competitive performance. The board continues to believe that simplifying our dual-headed structure would, over time, provide opportunities to further accelerate value creation and serve the best long-term interests of Unilever.Unilever has built a long track record of consistent and competitive performance. The board continues to believe that simplifying our dual-headed structure would, over time, provide opportunities to further accelerate value creation and serve the best long-term interests of Unilever.
The board will now consider its next steps and will continue to engage with our shareholders. We will proceed with the plan to cancel the NV preference shares, further strengthening our corporate governance.The board will now consider its next steps and will continue to engage with our shareholders. We will proceed with the plan to cancel the NV preference shares, further strengthening our corporate governance.
BREAKING - Unilever abandons plan to switch HQ to Netherlands from London after shareholder opposition https://t.co/XqPCXVyCC4BREAKING - Unilever abandons plan to switch HQ to Netherlands from London after shareholder opposition https://t.co/XqPCXVyCC4
More on Unilever soon.More on Unilever soon.
Also coming up:Also coming up:
8.30am BST: UK house prices for September, report by Halifax8.30am BST: UK house prices for September, report by Halifax
1.30pm BST: US non-farm payrolls for September1.30pm BST: US non-farm payrolls for September
We’ll also bring you the latest from markets, where bonds are under pressure as expectations build for more US rate rises.We’ll also bring you the latest from markets, where bonds are under pressure as expectations build for more US rate rises.