LONDON: Britain’s third biggest company Unilever picked Rotterdam over London for its main headquarters on Thursday in a blow to Prime Minister Theresa May’s government a year before Brexit.
The Anglo-Dutch maker of Dove soap, Lipton teas and Ben & Jerry’s ice cream launched a review of its dual-headed structure in 2017 after fighting off a $143 billion takeover from Kraft Heinz, triggering a battle between Britain and the Netherlands.
Under the new plan, Unilever will continue to be listed in London, Amsterdam and New York, and will divide into three divisions, keeping two based in Britain. That will enable it to retain its 7,300 staff in the United Kingdom.
The company said the decision to end 88 years of two parent-ownership was not linked to Brexit or any form of protectionism, but would simplify its structure and facilitate acquisitions.
However, British unions and supporters of EU membership bemoaned what they said was a deterioration in Britain’s competitiveness at a time when tax code changes and strong anti-takeover laws have made the Netherlands increasingly attractive.
“Let me categorically say that this had nothing to do with Brexit,” Unilever Chairman Marijn Dekkers told reporters.
“The board takes a 30 to 50 year decision. We think both countries are highly attractive investment climates and we will continue to invest in both countries as a result of this,” the Dutchman added.
It is unclear whether Unilever can remain in the FTSE 100 Index of leading UK stocks, a decision which could hit its shares if tracker funds are forced to sell.
Forged by the 1930 merger of Dutch margarine producer Margarine Unie and British soap maker Lever Brothers, Unilever employs nearly 170,000 people around the world to generate turnover of 53.7 billion euros ($66 billion) in 2017.
With a market value of 105 billion pounds ($146 billion), it competes with the likes of P&G, Kraft, Nestle, Colgate Palmolive, Reckitt Benckiser and independent brands.
In early 2017, the company — which had been thought to be too big to take over — managed to fight off one of the largest corporate bids ever made, but had to placate investors with a plan to boost profits and reinvigorate the group.
The short-lived bid battle has had widespread repercussions.
In the weeks after the offer, Chief Executive Paul Polman said Britain, known for promoting one of the most open economies in the world, should do more to protect national champions.
Unions in Britain have noted that Dutch companies have stronger powers to fight off unwanted takeovers, as seen last year when paint maker Akzo Nobel fended off a 26.3 billion euro bid from US rival PGG Industries.
“This is a tremendous boost,” Rotterdam Mayor Ahmed Aboutaleb said. “Rotterdam is a place that serves the interests of Unilever well as it will be less of a prey for takeovers.”
Chris Bryant, an opposition UK lawmaker and leading supporter of Open Britain which is urging post-Brexit Britain to remain close to the EU, said the choice of Rotterdam over London was a sign the business environment was weakening.
Unilever had held talks with both governments before making its decision, and the move will be seen as a blow to Prime Minister May, who is locked in talks with Brussels over the country’s departure from the EU on March 29, 2019.
Her government welcomed the reassurance on jobs, however.
In recent months, speculation had grown that Unilever would choose the Netherlands after Dutch Prime Minister Mark Rutte, himself a Unilever veteran, proposed a tax change seen as benefiting Anglo-Dutch multinationals.
Unilever said it did not expect any significant tax changes as a result of the deal. It said it had chosen the Netherlands because the Dutch company currently accounted for 55 percent of the group and those shares traded with greater liquidity.
As part of the restructuring, Unilever will create three divisions, with Beauty & Personal Care and the Home Care units being headquartered in London. The Foods & Refreshment division will be based in Rotterdam.
The company said it would give more authority to the heads of those divisions to set strategy.
The long-awaited announcement marks the latest change to the company after it agreed to sell its margarine and spreads business to US private equity firm KKR for 6.83 billion euros in December.
Polman was asked how long he would continue as CEO now he has made these changes, but said there was still a lot to be done and he remained energised by the job.
The restructuring, he said, would enable Unilever to make changes to its portfolio including major acquisitions, although he stressed he had no immediate plans to do this.
Unilever is not the only major company spanning Britain and the Netherlands — with Royal Dutch Shell and publishing group Relx having strong links with both countries.
REUTERS
Unilever picks Rotterdam for HQ as Britain loses the battle before Brexit
Unilever picks Rotterdam for HQ as Britain loses the battle before Brexit
Boeing focuses on quality management enhancement amidst safety concerns, says top official
RIYADH: Aerospace giant Boeing is enhancing its quality management system to meet regulatory standards, ensuring passenger safety, a top official told Arab News.
Speaking on the sidelines of the Future Aviation Forum in Riyadh, Omar Arakat, vice president of commercial sales and marketing of Boeing in the Middle East and Africa, said that the company is putting “a lot of emphasis” to meet the safety standards proposed by regulators.
The US plane maker is revamping its management in response to increasing pressure from airlines, regulators, and investors as it faces a deepening crisis following a mid-air panel blowout on a 737 MAX plane in January.
An Alaska Airlines Boeing 737-9 MAX experienced a mid-cabin exit door panel blowout shortly after takeoff, triggering multiple investigations, including one by the Federal Aviation Administration in the US.
When asked about safety developments, Arakat said: “I’m assuming you are referring to the quality issues that have made headlines, and I assure you that Boeing’s number one priority is safety and quality. We are doing a lot of plans to strengthen our quality management system.”
He added: “We’re also sharing with our customers all the steps that were taken to make sure that they feel the comfort that Boeing is doing the right thing.”
Detailing Boeing’s initiatives to enhance safety standards, Arakat added that the company is directly engaging with its suppliers and increasing involvement by inspecting various stages in the aircraft production cycle.
He expressed his enthusiasm about the progress in Saudi Arabia’s aviation sector during the discussion.
“We are very optimistic, and we are very excited about what is going on in Saudi Arabia in general, and specifically within the aviation sector. There is a lot of commitment by the leadership of Saudi Arabia to support aviation, and they recognize it as one of the most important pillars of developing infrastructure and moving forward,” said Arakat.
He added: “If you look at the mandates of Vision 2030, it really indicates that aviation has a very bright future because it sets some very real targets that the Kingdom is very serious about achieving. We are very proud to be part of that.”
The executive further noted that Boeing’s relationship with Saudi Arabia spans over seven decades, during which the company has delivered over 240 aircraft to airlines operating in the Kingdom.
Last year, Riyadh Air, owned by the Public Investment Fund, announced ordering up to 72 Boeing 787-9 Dreamliner airplanes in a significant deal. This included 39 confirmed aircraft and an option for an additional 33 wide-body 787-9 Dreamliners, reflecting Saudi Arabia’s ambitions to establish itself as a prominent player in global aviation.
National carriers collectively announced plans to purchase up to 121 787 Dreamliners, marking one of Boeing’s largest commercial orders by value.
Energy security is vital for prosperity among Arab citizens, says top official
RIYADH: A comprehensive and integrated approach is needed to ensure energy security amongst citizens, according to the Assistant Secretary-General and Head of the Economic Affairs Sector at the Arab League, Ali Al-Maliki.
During the 12th celebration of Arab Energy Efficiency Day, Al-Maliki urged the adoption of new measures to address this critical issue.
“Energy security is a fundamental issue due to its direct impact on economic growth, national security, and the well-being of all Arab citizens,” he stated in a speech delivered on his behalf by the Director of the Energy Department at the General Secretariat of the Arab League, Jamila Mattar.
“We are all aware of the challenges we face in terms of energy security and the transition to more sustainable sources,” the speech said.
“To confront these challenges, the world needs to adopt a comprehensive and integrated approach to energy security that takes into account the need to increase energy efficiency, develop renewable energy, protect vital energy infrastructure, and work to reduce harmful carbon emissions,” the text added.
Al-Maliki emphasized that efficiency is one of the basic pillars of energy security, according to a report by Bahrain News Agency.
He noted that achieving energy security involves providing services at the lowest cost without compromising quality and managing demand by introducing various concepts related to efficiency.
This approach aims to reduce consumption without conflicting with the developmental plans of each country.
Al-Maliki highlighted the council’s efforts to monitor the stages of efficiency in the Arab region. This includes developing, implementing, and monitoring national efficiency plans.
The council has also prepared the Renewable Energy and Energy Efficiency Guide in Arab Countries, which provides statistical information on policies and programs adopted in nations to enhance the efficiency of production and consumption and the use of renewables.
Additionally, the guide details the institutional and legal frameworks and the necessary financial incentives implemented or planned in these fields.
Saudia orders additional 105 aircraft from Airbus
RIYADH: Saudia Group has signed an order for an additional 105 A320neo family aircraft, marking the largest aircraft deal with Airbus in the Kingdom’s history.
Announced at the Future Aviation Forum in Riyadh, the order comprises 12 A320neo and 93 A321neo aircraft, and increases Airbus aircraft order backlog from the Saudi Arabia’s national flag carrier to 144 A320neo family aircraft.
Saudia Group is set to receive the first aircraft in the first quarter of 2026. These aircraft will be distributed between Saudia and flyadeal, the group's low-cost carrier.
The agreement was announced in the presence of Minister of Transport and Logistic Services Saleh bin Nasser AI-Jasser, Director General of Saudia Group Ibrahim Al-Omar, and Benoît de Saint-Exupéry, executive vice president sales of Airbus.
Al-Omar said: “Saudia has ambitious operational objectives to meet growing demand. We are increasing flights and seat capacity across our existing 100+ destinations on four continents, with plans for further expansion.
“The progress of Saudi Vision 2030 is attracting more visits, tourists, entrepreneurs, and pilgrims each year. This motivated our decision to secure this significant deal, which will create jobs, increase local content, and contribute to the national economy.”
De Saint-Exupéry said the new aircraft will play a “vital role” in contributing to Saudi Arabia’ ambitious Vision 2030 plan.
He added: “It will enable Saudia Group’s strategy to advance the Kingdom’s aviation capabilities while enabling both airlines to benefit from the A320neo Family’s exceptional efficiency, superior economics, highest level of passenger comfort as well as lower fuel-burn and emissions.”
Saudi-Chinese financial ties to strengthen as top officials meet in Beijing
RIYADH: Saudi and Chinese top officials are holding joint meetings in Beijing focused on fostering international economic growth.
The sessions, which are slated to take place from May 20 - 21 in Beijing, include the Kingdom’s Minister of Finance Mohammed Al-Jadaan, the newly appointed Vice Minister of Finance Abdulmuhsen Al-Khalaf, along with officials from the Ministry of Finance, the National Center for Privatization, and the Saudi Central Bank.
Officials from the Capital Market Authority, Zakat, Tax and Customs Authority as well as the National Development Fund, are also part of the delegation, as well as representatives from the Saudi Fund for Development, and the National Infrastructure Fund.
In a post on his X account, Al-Jadaan said: “Today (May 20), as part of my visit to China, I met with the Chinese Minister of Finance, Lan Fo’an. We discussed ways to enhance the finance, trade and investment cooperation between Saudi Arabia and China to advance prosperity and growth for the global economy.”
The Saudi finance minister and his Beijing counterpart co-chaired the third meeting of the Financial Sub-Committee for the High-level Chinese-Saudi Joint Committee, where Al-Jadaan emphasized that China is a key partner in the Kingdom’s transformation under Vision 2030, according to a statement by the Saudi Finance Ministry.
The release added that the minister would participate in a roundtable discussion organized by the NCP in cooperation with the Industrial and Commercial Bank of China.
Al-Jadaan will also speak with various Chinese ministers, officials, and investors, focusing on recent economic and financial developments, shared interests, and investment prospects in Saudi Arabia, aligning with the Kingdom’s Vision 2030 goals.
Meanwhile, Al-Khalaf and the Chinese Vice Minister of Finance, Liao Min, will co-chair a roundtable meeting hosted by the Chinese Ministry of Finance and organized by the China Development Bank and the China Investment Corp.
Al-Jadaan’s visit to the Asian powerhouse comes after he used a panel discussion at the Qatar Economic Forum on May 14 to urge financial planners to optimize their strategies to curb “economic leakage” and prevent resources or funds from being wasted.
Calling for the adoption of prudent fiscal policies, the minister said at the event that spending during a time of global inflation results in increased project costs, which he believes further fuels inflation and “overheats” the economy.
Diplomatic and economic ties between Saudi Arabia and China have been strengthening in recent years, and in November the Kingdom’s central bank, also known as SAMA, and the People’s Bank of China signed a local currency swap agreement worth $6.93 billion.
The agreement will last three years, but China’s central bank said at the time it can be extended after two years by mutual agreement.
Saudi Arabia’s first quantum computer on its way after Aramco, Pascal deal
RIYADH: Saudi Arabia's first quantum computer is set to be installed after energy giant Aracmo signed an agreement with computing firm Pasqal.
Under the deal, the French company will install, maintain and operate a 200-qubit device, scheduled for deployment in the second half of next year, according to a press statement.
A quantum computer uses qubits to run multidimensional algorithms, and these machines are capable of solving complex problems faster than traditional computers.
Ahmad Al-Khowaiter, executive vice president of technology and innovation at Aramco, said the deal with Pasqal is expected to bring high-performance information processing to Saudi Arabia.
“In a rapidly evolving digital landscape, we believe it is crucial to seize opportunities presented by new, impactful technologies and we aim to pioneer the use of quantum computing in the energy sector,” said Al-Khowaiter.
He added: “Our agreement with Pasqal allows us to harness the expertise of a leading player in this field as we continue to build state-of-the-art solutions into our business. It is also further evidence of our contribution to the growth of the digital economy in Saudi Arabia.”
The quantum computer that will be installed in Saudi Arabia will initially use an approach called “analog mode.”
Within the following year, the system will be upgraded to a more advanced hybrid “analog-digital mode,” which is more powerful and able to resolve more complex tasks, the statement added.
The agreement follows a memorandum of understanding signed between Aramco and Pasqal in 2022 to collaborate on quantum computing capabilities and their applications in the energy sector.
Georges-Olivier Reymond, CEO and co-founder of Pasqal, noted that the agreement would see the commercial adoption of quantum computers in the Kingdom.
“This isn’t just any quantum computer; it will be the most powerful tool deployed for industrial usages, unlocking a new era of innovation for businesses and society,” said Reymond.
Earlier this month, Aramco also signed three MoUs with US firms, including Aeroseal, Spiritus, and Rondo, to accelerate the development of potential lower-carbon solutions.
In May, Aramco also announced its financial results for the first three months of this year.
The company revealed that its net profit reached $27.27 billion in the first quarter, representing a rise of 2.04 percent compared to the last quarter of 2023.
