Unilever pulls the lever for London HQ exit as Brexit looms

Comment Martin Flanagan

ADutch proverb has it that “Amsterdam dreams, Rotterdam works”. With a Brexit twist, British/dutch consumer goods giant Unilever has adjusted that to Rotterdam works, London won’t.

The company has confirmed that it is to move its global headquarters from the London banks of the River Thames to the Dutch port city. This deals a significant blow to the UK government as it argues that it will be business as usual in every sense after the UK’S withdrawal from the single market. Unilever is one of the bluest of blue-chips in the FTSE 100 index and it could also give ideas to some other constituents about domicile in the current business twilight zone approaching Brexit.

International capital is very fluid. Sentiment comes a distant second to pragmatism. Banking major HSBC weighed seriously in recent times about whether to move its HQ from Canary Wharf to its historical heartland of Hong Kong before finally staying put here – but moving its UK HQ to Birmingham. And Barclays was prepared in 2007 to sever its three centuries association with London and move domicile to dreamy Amsterdam in a bid to clinch its £80 billion merger with Dutch bank ABN Amro.

Never mind that Barclays dodged a bullet by being “beaten” to the prize by a Royal Bank of Scotland-led consortium for ABN, one of the most Pyrrhic corporate victories in the past generation.

Major corporates, often peopled at the top by Theresa May’s “citizens of nowhere”, regard HQS and branding as soft “social issues”, far outweighed by commercial touchstones such as financial and operational advantage, regulatory factors and political dimensions. Unilever, which stands behind a panoply of household brands, claims that the move to Rotterdam has nothing to do with Brexit. Well, for a group with a big UK sales exposure, it wouldn’t make political sense to say otherwise.

It is true there are other factors. The company was shaken out of any complacency by the hostile takeover bid from US giant Kraft Heinz last year. And dual-headed legal structure increasingly look a complicated anachronism.

But looming Brexit would hardly constitute a cogent reason for Unilever to resist a strategy they were already leaning towards for their own reasons.