Royal Dutch Shell said on Monday it would scrap its dual share structure and move its head office to Britain from the Netherlands, pushed away by Dutch taxes and facing climate pressure in court as the energy giant shifts from oil and gas.
The company, which long faced questions from investors about its dual structure and had recently been hit by a Dutch court order over its climate targets, aims to drop “Royal Dutch” from its name – part of its identity since 1907 – to become Shell Plc.
The Anglo-Dutch firm has been in a long-running tussle with the Dutch authorities over the country’s 15% dividend withholding tax, which Shell sought to avoid paying with its two share classes. Its new structure would resolve that issue.
In a further knock to its relations with the Netherlands, the biggest Dutch state pension fund ABP said last month it would drop Shell and all fossil fuels from its portfolio.
The Dutch government said on Monday it was “unpleasantly surprised” by Shell’s plans to move to London from The Hague.
Shell’s shares, which will still be traded in Amsterdam and New York under the plan, climbed more than 2% in London on Monday morning after the news.
“The current complex share structure is subject to constraints and may not be sustainable in the long term,” Shell said, as it announced its plan to change its share structure.
The move requires at least 75% of votes by shareholders at a general meeting to be held on Dec. 10, Shell said.
“We see merits in the proposed restructuring of Shell’s shares structure and tax residence. Among other benefits, the proposed changes will increase Shell’s ability to buy back shares,” Jefferies said in a research note.
Monday’s move follows a major overhaul Shell completed this summer as part of its strategy to shift away from oil and gas to renewables and low-carbon energy. The overhaul included thousands of job cuts around the world.
Source: Reuters
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