- Unilever shares were one of the FTSE 100’s biggest fallers on Thursday
- Officials from the US, UK and the Netherlands have all lobbied Unilever
The London Stock Exchange is set to miss out on a blockbuster primary listing of Unilever’s ice cream business, with the consumer giant opting for a European venue instead.
Unilever, which owns the Ben & Jerry’s brand, told investors it would spin off its ice cream business with listings in London, Amsterdam, and New York.
But the consumer goods giant told the Reuters news agency on Thursday that the new company’s primary listing and headquarters would be in the Netherlands.
Unilever’s decision in 2020 to domicile in London rather than Rotterdam saw the firm make assurances to the Dutch government that its food and refreshment division would IPO in Amsterdam if it opted to spin the unit off.
The segment was eventually split into two parts, nutrition and ice cream, three years ago as part of a corporate overhaul.
Unilever’s ice cream division is home to multiple famous brands, including Magnum, Wall’s, and Ben & Jerry’s, and earned €8.3billion in turnover last year.
Demerger: Ben & Jerry’s owner Unilever has unveiled plans to spin off its ice cream business
Officials from the US, UK, and the Netherlands have all since lobbied Unilever to list the business in their respective territories.
Chancellor Rachel Reeves even met the group’s chief executive, Hein Schumacher, and its British Isles boss, Marc Woodward, in person to make the case for a London listing.
Alongside this, the UK Government has revamped listing rules to try and revitalise London’s flagging stock market, which has suffered an exodus of major businesses in recent years.
Many big names, from cybersecurity giant Darktrace to Paddy power owner Flutter Entertainment and drinks producer Britvic, have either been acquired by foreign firms or transferred their primary listings overseas.
Unilever said the decision to be incorporated in the Netherlands follows a board review and was ‘focused on maximising returns for shareholders.’
Dirk Beljaarts, the Dutch minister of economic affairs, said Unilever’s decision proved its ‘confidence in the Netherlands and underscores the competitiveness and attractiveness of our business climate’.
It came as Unilever posted sales growth of 1.9 per cent to €60.8billion for last year, thanks to underlying growth across all segments.
Beauty and wellbeing revenues increased by 5.5 per cent to €13.2billion, supported by strong demand for Sunsilk shampoo, Dove, and Vaseline.
Meanwhile, underlying sales of personal care products expanded by 5.2 per cent on the back of growing orders for deodorants like Axe and Rexona.
However, the company’s operating profits slipped by 3 per cent to €9.4billion due to spending related to its productivity programme and money lost from disposals.
Unilever also warned that near-term market growth was set to remain ‘subdued’ before improving over the year when prices rise in response to higher commodity costs.
Chris Beckett, head of equity research at Quilter Cheviot, said: ‘Consumers simply aren’t spending as they were in the aftermath of the pandemic, and an uncertain economic environment has caused a retrenchment in consumer behaviour, with discretionary items the first to go.’
Unilever shares shrank 6.9 per cent to £44.22 in early trading, making them the FTSE 100’s second-biggest faller behind British American Tobacco.
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