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Law360, London (November 2, 2020, 3:16 PM GMT) -- A judge on Monday signed off Unilever's plans to end its 90-year-old corporate structure and combine its British and Dutch businesses into a single parent company in the U.K., a move the consumer products giant hopes will allow it more easily to navigate the pitfalls of the coronavirus pandemic.
Judge Richard Snowden cleared plans by the business to consolidate its parent companies into Unilever PLC in the U.K., saying at the High Court that the merger had almost unanimous support from shareholders.
The court's approval allows the maker of Dove soap and Hellman's mayonnaise to move a step closer toward folding Unilever NV into its British counterpart, ending a dual legal structure that had been in place since 1930.
"I'm bound to say, I think, on a matter such as this the court has to expect, given the law firms involved, that greater minds have been applied to the mechanics" of the deal, Judge Snowden said. "Unless I thought the shareholders were just barking mad I would regard them as the best judges of their interests."
The company set out the plan to make it easier to acquire other businesses or spin off parts of its activities — such as the sale of its tea operations — flexibility that it says it urgently needs in the COVID-19 environment.
The deal means that shareholders of Unilever's Dutch business will get an equal number of shares in the British company. It follows a failed $143 billion takeover offer by U.S. food company Kraft Heinz in 2017 and the rejection by British shareholders of plans to shift headquarters to the Netherlands.
Consolidation is expected to reduce some of the complexity in the company's corporate governance and will give equal voting on a per-share basis for the first time, Unilever has said.
Unilever, which also makes Ben & Jerry's ice cream, has said that the move will not result in lower costs and that it plans to stay listed on the Amsterdam and London stock exchanges. More than 99% of shareholders have backed the proposals.
The move comes despite opposition by some Dutch lawmakers who ha proposed plans to hit Unilever with a one-time "exit tax" for shifting its headquarters to London.
Unilever employs some 2,500 people in the Netherlands and another 6,000 in the U.K. The company's food and drinks business and research and development center will stay in Rotterdam, distinct from its personal beauty products division in London.
The company has sought the court order in London partly to allow it to apply for exemptions from the U.S. Securities and Exchange Commission.
A spokesperson for the company did not immediately respond to a request for comment.
Unilever is represented by Martin Moore QC and Ben Shaw of Erskine Chambers.
The case is Unilever PLC, case number CR-2020-002811, in the High Court of Justice of England and Wales.
--Editing b y Ed Harris.
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