Unilever Warns of Dutch Tax Proposal’s Risk for Plan to Move

Unilever said the consumer-goods maker would have to abandon a plan to unify its headquarters in London and scrap its Dutch base if an opposition party’s proposal for a corporate exit tax were to go ahead.

The maker of Ben & Jerry’s ice cream and Dove soap said it believes the proposal, submitted by the opposition Green party, is contrary to international law, but if it were implemented, the company would face a bill of about 11 billion euros ($12.9 billion). Unilever made the comments in the risk disclosure of the prospectus for its unification, which the company said it aims to complete in November.

The proposal by the minority party would need to go through both houses of the Dutch parliament, and it’s not clear how long that would take or how probable it would be. It would be retroactive to corporate moves completed after July 10. The Greens have 14 of the 150 seats in the lower house of parliament.

Unilever shares traded 0.8% higher in London.

Unilever has said it wants to end its dual share structure to make it easier to do big M&A deals. The company is likely to make “transformational” acquisitions as soon as it achieves unification, wrote David Hayes, an analyst at Societe Generale.

The consumer-goods giant scrapped a plan to create a single headquarters in Rotterdam two years ago. The Dutch government at the time was planning to ease dividend-withholding tax to accommodate Unilever, but U.K. shareholders objected and the company reversed course.

Unilever has maintained dual nationality since the 1930 merger of Margarine Unie of the Netherlands and U.K. soapmaker Lever Brothers.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.