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Unilever to maintain Netherlands, London listings after structural review

Anglo-Dutch consumer goods giant Unilever Plc said it would maintain stock market listings in the Netherlands and the U.K. regardless of the outcome of its review of its dual-headed legal structure, which could see it choose between headquarters in Rotterdam and London.

The company, whose products include Dove soap and Ben & Jerry's ice cream, said in a statement issued ahead of its annual investor event Nov. 29-30 that following any unification it envisaged "one lean, agile" corporate center. It currently performs head office duties in London and in Rotterdam in the Netherlands. The review comes at a time when the U.K. is negotiating its departure from the European Union.

"I'm advocating to postpone decisions because it's a moving playing field — with political turbulence out there," CEO Paul Polman was quoted as saying by the Financial Times. "The emotions of the moment are really the issue."

Unilever launched a review of its dual-headed legal structure in April. It said it expected the process to be completed by the end of 2017, but said Nov. 28 that it had not been completed yet.

Regardless of the outcome, Unilever said it intended to maintain listings in the Netherlands, the U.K. and the U.S., and to continue to apply British and Dutch corporate governance codes. It is committed to terminating the preference shares of the Dutch legal entity, Unilever NV, a step it launched in October.

"This review is progressing well and the Board considers that unification with a single share class would be in the best interests of Unilever and its shareholders as a whole, providing greater ongoing strategic flexibility for value-creating portfolio change," the company said.

Unilever was the target of an aborted $143 billion takeover attempt by Kraft Heinz Co. in February. In April it said it would accelerate a plan to deliver sustainable value creation for shareholders and added that it intended to sell its spreads business, including the Flora brand. Most observers expected Unilever to increase its focus on personal and household products, which generally carry higher margins than food brands.

However, it said its legal structure added a layer of complexity to streamlining its portfolio, prompting it to begin the review.

Unilever has announced or completed nine acquisitions in 2017. On Nov. 27, it announced the purchase of Sundial Brands LLC, a New York-based hair and skin care company whose products are popular with African Americans. Terms were not disclosed.

It reconfirmed its outlook for 2017, with guidance for underlying sales growth within a range of 3% to 5%, and an improvement in underlying operating margin of at least 100 basis points.

Unilever expects to deliver underlying sales growth of 3% to 5% through 2020, outperforming growth in the markets where it operates. It is also targeting an underlying operating margin target of 20% by 2020.