The FTSE100 is in danger of losing one of its largest holdings – in fact its third biggest – later this year, after Unilever announced plans to abolish its dual company status, and relocate its domicile to the Netherlands.

The Anglo-Dutch consumer giant has for years maintained separate UK and Dutch holding companies, but in March said it would simplify this structure by having just one HQ in Rotterdam, abandoning its London head office.

This is undoubtedly a major blow for the UK from a ‘prestige’ point of view, and potentially from an investment and jobs point of view.

It is also a blow for UK investors as, while the shares will continue to be listed in the UK, the company will in all likelihood be dropped from the FTSE100 index of leading shares.

The difference between ‘dual listed’ and ‘listed’ is complicated, but in effect the UK listing would become a secondary listing to a primary listing in the Netherlands, with implications for matters like benchmark inclusion.

There are a number of reasons for the change. The main one is corporate simplicity.

Currently, Unilever has two boards, two annual general meetings, two sets of accounts in Sterling and Euros, two headquarters and two sets of shareholders. In future, there will be just one. This could facilitate the process of issuing new shares, acquiring other companies etc.

There is also Brexit, and its implications for UK membership of the Single Market, which may make Holland a more favourable domicile.

Holland dropped its withholding tax on dividends last year, making the country more attractive for international companies.

It is worth noting that the Dutch Prime Minister, Mark Rutte, is a Unilever veteran himself.

There is also the fact that a greater proportion of the shares (55 per cent of the group’s combined ordinary share capital) is listed in the Netherlands, and trades with greater liquidity than the shares listed in London.

Lastly, there are the continued ramifications of the bid for Unilever by Kraft Heinz in February 2017, when Unilever was shocked to its roots by an audacious unsolicited takeover attempt by a company nearly half its size.

Takeover protections are much greater in Holland, where acquiring companies must take into account all ‘stakeholders’, and not just shareholders, in any acquisition.

Unilever was formed from the merger of Lever Brothers and a Dutch margarine company in 1930, and the dual company structure has existed ever since.

While the UK is no longer massively important in terms of Unilever’s global sales – UK sales are around £1.8bn out of £47bn – the UK continues to be important in terms of research and development.

The company has three global research facilities at Port Sunlight in Merseyside, Colworth in Bedfordshire, and Leeds, as well as manufacturing sites and distribution depots all around the UK.

Unilever employs 7,300 people in the UK, and 3,100 people in the Netherlands. The company says they will be unaffected by the changes.

Abolishing the dual structure completes a simplification process begun in 2005, when for the first time directors of Unilever PLC became board members of Unilever NV (previously the two boards had different members, with the separate boards sometimes leading to rivalry and opaque reporting lines).

The vote on the matter occurs in September. The special resolution will require 75% approval for UK shareholders, but just 50% approval for Dutch shareholders.

Some UK shareholders have expressed disapproval of the change, on the basis that relegation from the FTSE100 index will make the stock difficult or impossible for them to hold, but it seems unlikely there will be enough to vote it down.

Many long standing UK shareholdersare likely to retain holdings in what has been a reliable shareholding over many decades, despite the change in domicile and the FTSE relegation.

But Unilever is likely to feature less prominently in UK corporate life in future.

The opinions stated are those of the author and should not be taken as investment advice. Any recommendations may not be suitable for all, so please contact your financial adviser for further guidance. The value of investments can go down as well as up.