Flutter to Join Stoxx 50 as Unilever Exits on Headquarters Move
(Bloomberg) -- Gambling group Flutter Entertainment Plc will replace Unilever NV in one of the euro area’s main stock benchmarks, the result of a technical change brought about by the consumer-goods giant becoming ineligible.
Unilever’s move to combine its U.K. and Dutch arms under a single British headquarters means it will automatically be removed from the Euro Stoxx 50 benchmark, according to a statement by index provider Stoxx Ltd. Flutter’s Dublin-listed stock will be added to the gauge.
Unilever drops out of the index after deciding to eliminate dual legal structures, a move that will result in one class of shares and a single pool of liquidity, providing more flexibility for stock-based dealmaking. Its replacement, Flutter, has rallied 45% year-to-date, partly driven by the completion of the firm’s takeover of PokerStars-owner The Stars Group Inc.
Unilever remains part of the wider European benchmarks, yet the step will also affect the Stoxx Europe 600 and Stoxx Europe 50 Index where both the U.K. entity as well as the Dutch shares were included. The latter will be removed from both benchmarks with another lockdown winner, online drug retailer Zur Rose Group AG, taking the place in the larger Stoxx Europe 600, while tech investor Prosus NV will join the Stoxx Europe 50 gauge.
Inclusion in widely followed indexes is becoming more important for companies in a world increasingly dominated by passive investment funds. Bank of America Corp. strategists predict that equity assets in index-tracking funds will surpass actively managed portfolios in August 2021.
All index changes announced on Thursday will become effective Nov. 30. Stoxx’s official index review is set to take place on Dec. 1.
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