a Royal Dutch Shell announced this Monday (15) that it would abandon its dual stock structure and move its headquarters from the Netherlands United Kingdom, sidelined by Dutch taxes and facing climate-related pressure in court as the energy giant tries to move away from oil and natural gas.
The company, which has long faced investor skepticism about its dual structure and was recently hit by a court order Dutch On its climate goals, it intends to drop “Royal Dutch” from its name – part of its identity since 1907 – to become Shell plc. Dutch, in English, means Dutch.
The Anglo-Dutch company has long been in dispute with the Dutch authorities over the country’s 15% tax. Dividend, which Shell tried to avoid paying with its two classes of shares. Its new, unique structure will solve this problem and allow Shell to more quickly close sales or acquisition deals.
In another blow to its ties with the Netherlands, ABP, the Netherlands’ largest state pension fund, said last month that it would remove Shell and all fossil-fuel-related companies from its portfolio.
The Dutch government said on Monday it was “unpleasantly surprised” by Shell’s plan to move from The Hague to London.
However, the decision will be seen as a vote of confidence in London Britain’s exit from the European Union A multi-billion-euro turnaround began in daily trading of shares in Amsterdam from the UK capital.
Shell shares, which are yet to be traded in Amsterdam and New York, rose more than 2% London Monday morning after the news.
“The existing complex ownership structure is subject to restrictions and may not be sustainable in the long term,” Shell said in announcing its plans to replace the structure. The company said the change requires at least a 75% shareholder vote at its December 10 general meeting.
“We see merit in Shell’s proposal to restructure the share structure and tax residency. Among other benefits, the proposed changes will increase Shell’s ability to repurchase shares,” Jefferies said in a research note.
Shell said it would return $7 billion from the sale of assets America In addition to the ongoing share buyback program for ConocoPhillips.
Monday’s move follows a major shift that Shell completed this summer in the Northern Hemisphere as part of its strategy to move from oil and gas to renewable energy and low-carbon energy. The movement involved cutting thousands of jobs around the world.
In May, a Dutch court ordered Shell to deepen its planned cuts in greenhouse gas emissions to align with Paris Agreement, which aims to limit global warming to 1.5ºC. Shell said it would appeal the decision.
Adam Matthews, chief investment officer responsible for the Church of England Pension Board, a Shell shareholder, said: “If this decision allows the company to be more agile in making its transition to zero net emissions, it should be viewed positively. “
Mathews, who is leading negotiations with Shell on behalf of the Climate Action 100+ investor group, said the group should not take responsibility for the company for implementing the Dutch court’s decision.
Shell is also fighting a call by activist investor Third Point last month to split the company into multiple companies. Top Shell executives responded, saying the company’s businesses worked better together.
Corporate giants are under increasing pressure to simplify their structures, with General Electric, Toshiba and Johnson & Johnson announcing plans to split into separate companies last week.
Dual listings, which are more expensive to maintain, are also falling out of favor.
consumer products giant Unilever Last year abandoned its dual Anglo-Dutch structure in favor of a single London-based entity. Mining company BHP Group also dismantled this structure.