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THE KRAFT HEINZ COMPANY

(KHC)
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Unilever's bid to end Anglo-Dutch dual-headed structure

06/11/2020 | 10:02am EDT
Unilever headquarters in Rotterdam

Anglo-Dutch Unilever plans to become a single holding company based in Britain, unwinding a dual-headed structure which has been in place for 90 years.

Following are details of the consumer goods company's plan, its rationale and reaction:

WHAT IS UNILEVER DOING?

Unilever has been owned through two separately listed companies, a Dutch NV and a UK PLC, since it was set up in 1930 through the merger of Dutch margarine firm Unie and British soap maker Lever Brothers.

Unification would be achieved through a cross-border merger, with shareholders of Dutch Unilever NV getting one share in British Unilever Plc for each share held.

DEJA VU?

Unilever had planned to move its base to Rotterdam in 2018 under previous management, but this was thwarted by a revolt by British investors concerned that they would be liable for Dutch taxes on their dividends and also over the impact of a possible eviction from the FTSE 100 index of leading British shares.

Under the new plan, Unilever shares will retain a listing in Amsterdam as well as London and New York and the company expects to remain part of the AEX index of Dutch shares, meaning large Dutch institutions are likely to remain as investors.

WHAT IS THE IMPACT?

Unilever, whose brands include Ben & Jerry's ice cream, Lipton tea, Domestos bleach and Dove soap, says that the change will make the business easier to run and more agile when it comes to pursuing M&A or spinning off activities.

The original review that led to the plan rejected two years ago was spurred by an abortive $143 billion takeover approach by Kraft Heinz in February 2017.

The company is at pains to stress that there will be no changes for its 6,000 staff in Britain and around 2,500 workers in the Netherlands.

WHAT IS THE REACTION?

Britain, which left the European Union earlier this year, welcomed the move as a "vote of confidence", while the Dutch government expressed "regret".

The Dutch government will miss out on revenue from a 15% tax that it had previously withheld on Unilever NV dividends -- a sum of more than 300 million euros ($340 million) in 2019 -- but it is not clear how much of that it retains on a net basis.

The head of the Dutch association for shareholders, Paul Koster, said the Netherlands risked being more exposed if Britain and its former EU partners failed to agree a trade deal.

"Many questions are still open regarding Brexit. What will happen with production locations? What influence will politics have?" Koster said.

(Editing by Keith Weir and Alexander Smith)


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
AEX 1.41% 749.42 Real-time Quote.19.98%
AEX ALL-SHARE 1.24% 1066.92 Real-time Quote.17.91%
BASE CO., LTD. 1.75% 4935 End-of-day quote.-19.76%
BASE, INC. -3.36% 1525 End-of-day quote.-21.88%
CHANGE INC. -1.75% 2634 End-of-day quote.-25.28%
DUAL CO., LTD. -0.53% 4715 End-of-day quote.39.70%
EURO / BRITISH POUND (EUR/GBP) -0.02% 0.856 Delayed Quote.-4.32%
FTSE 100 0.85% 7027.58 Delayed Quote.8.78%
MSCI UNITED KINGDOM (STRD) 0.84% 1132.599 Real-time Quote.8.94%
S&P UNITED KINGDOM (PDS) 0.88% 1399.75 Delayed Quote.9.30%
SET -0.47% 1545.1 Real-time Quote.6.61%
THE KRAFT HEINZ COMPANY 1.08% 39.22 Delayed Quote.13.16%
UNILEVER PLC 2.37% 4144 Delayed Quote.-5.65%
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Sales 2021 25 238 M - -
Net income 2021 3 200 M - -
Net Debt 2021 18 885 M - -
P/E ratio 2021 15,9x
Yield 2021 4,10%
Capitalization 47 972 M 47 972 M -
EV / Sales 2021 2,65x
EV / Sales 2022 2,70x
Nbr of Employees 38 000
Free-Float 53,8%
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Mean consensus HOLD
Number of Analysts 21
Last Close Price 39,22 $
Average target price 42,93 $
Spread / Average Target 9,46%
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Managers and Directors
Miguel Patricio Chief Executive Officer & Director
Carlos Arturo Abrams-Rivera President
Paulo Basilio Chief Financial Officer
Alexandre Behring da Costa Chairman
Flavio Torres Head-Global Operations
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