Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Shell to drop ‘Dutch’ from name, relocate HQ to London

Shell to drop ‘Dutch’ from name, relocate HQ to London

Oil giant Shell has been under pressure from activist investor Dan Loeb to split itself in two.

Royal Dutch Shell Plc announced a major overhaul of its legal and tax structure that will see the company walk away from the Netherlands amid deteriorating relations with what’s been its home country for a century.

The changes come as Shell is battling activist investor Dan Loeb, who’s demanding the company split itself into two to attract shareholders leaving the energy sector because of concerns over climate change.

Shell said Monday that it planned to eliminate its current dual share structure, drop “Royal Dutch” from its name, relocate its tax residence to the U.K. and move its top executives from The Hague to London. The Dutch government immediately said it was “unpleasantly surprised” by the announcement.

Adopting a simplified structure has been on the cards for years, but Shell’s relations in its country of origin have become increasingly fraught of late. Dutch pension fund ABP said last month it would drop the oil major – and all fossil fuels – from its portfolio without warning, while in May a court in The Hague ruled the firm must slash its emissions harder and faster than planned.

“The simplification will normalize our share structure under the tax and legal jurisdictions of a single country and make us more competitive,” Chairman Andrew Mackenzie said in a statement. “Shell will be better positioned to seize opportunities and play a leading role in the energy transition.”

The firm has been incorporated in the U.K. with Dutch tax residence and a dual share listing since the 2005 unification of Koninklijke Nederlandsche Petroleum Maatschappij and Shell Transport & Trading Co. It was not envisaged at the time that the share structure would be permanent, the company said.

Shell also said it’ll likely no longer meet the conditions for using “Royal” in its title – a part of its name since 1907 – and expects to become Shell Plc, subject to shareholder approval.
U.K. Boost

U.K. Business Secretary Kwasi Kwarteng welcomed the news, saying it was a “clear vote of confidence in the British economy” and would “attract investment and create jobs.” Shell said about 10 executives – including Chief Executive Officer Ben van Beurden and Chief Financial Officer Jessica Uhl – would be relocating to Britain.

“Shell informed the cabinet about this intention yesterday,” Dutch Minister for Economic Affairs and Climate Policy Stef Blok said. “We are unpleasantly surprised by this news. The government deeply regrets that Shell wants to move its head office to the United Kingdom.”

Although the Netherlands is famously business-friendly, Prime Minister Mark Rutte has had to act on growing sentiment that companies don’t give back enough. He had to backtrack on a 2017 plan to scrap a dividend tax, throwing Shell’s head-office structure into doubt. Consumer-goods maker Unilever Plc also ended its dual structure in 2020 and registered as a fully British company.

Like its European peers, Shell has embarked on a multi-decade strategy to rein in its emissions, in part by selling more low-carbon fuels. But its approach to the energy transition is struggling to gain traction. Ahead of its earnings report last month, activist investor Loeb revealed his fund Third Point LLC had taken a $750 million stake in Shell and was pushing to break up the company.

Third Point’s position came to light just days after long-time Shell ally ABP said it would divest 15 billion euros ($17.2 billion) of fossil-fuel assets by early 2023, including its holding in the energy giant.

Legal Appeal


The investor pressure comes on top of legal challenges. Shell is appealing the May court verdict, which said the company must cut its emissions 45% by 2030.

“The simplification will have no impact on legal proceedings related to the Dutch court ruling,” Mackenzie said, adding that the company has already expanded its carbon-reduction targets.

The change to the share classes removes a disadvantage Shell had versus its peers, according to Sanford C. Bernstein analyst Oswald Clint. It will end the misalignment of two different tax and revenue authorities, removing the “friction and withholding tax issues around buybacks, while allowing them to increase materially,” he said.

Having cut its dividend at the height of the pandemic last year, Shell has spent the last 1 1/2 years trying to repair relations with shareholders. The company reintroduced buybacks in July and has promised to return an additional $7 billion of proceeds from the sale of its U.S. Permian assets to investors.

Shell is currently limited to around $2.5 billion of share repurchases per quarter, a figure that could double under the new structure, according to RBC Europe Ltd. analyst Biraj Borkhataria. “To us, this suggests Shell’s intention to return more than this to shareholders over the coming years,” he said.

Investors will be asked to vote on a special resolution on the simplification plans. A general meeting is scheduled to be held in Rotterdam on Dec. 10.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Hungary Ranked Among the World’s Safest Travel Destinations for 2025
G7 Leaders Fail to Reach Consensus on Key Global Issues
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
Wreck of $17 Billion San José Galleon Identified Off Colombia After 300 Years
×