In this article, we provide a brief summary of Royal Dutch Shell PLC’s migration from the Netherlands to the United Kingdom.
Shell has been incorporated in the UK with Dutch tax residence and a dual share structure since 2005, following the unification of the Royal Dutch Petroleum Company and The Shell Transport and Trading Company. However, it was not envisaged at the time of the unification that the dual A/B share structure would be permanent, and on November 15, 2021, the company announced that it would create a single line of shares and align its tax residence with its country of incorporation in the UK.
This proposal was unanimously supported by Shell’s board, and on December 10, 2021, shareholders voted overwhelmingly in favour of the move.
The company announced its decision to proceed with the plan on December 20, following a consultation with the Centrale Ondernemingsraad van Shell Nederland (Central Staff Council of Shell Netherlands) and the Shell European Works Council.
As a consequence of the decision, the company will change its name from Royal Dutch Shell to Shell PLC.
Reasons For The Move
The move is intended to boost the firm’s competitiveness by eliminating its complex dual A/B share structure and creating a single line of shares under the legal and tax jurisdiction of a single country. This, the board says, should make the company nimbler as it transitions towards becoming a net-zero emissions business and make it easier for investors to understand and value the company’s shares.
The move will also enable board and executive meetings to be held in one country – the United Kingdom – with the company’s chief executive and chief financial officers to also be located in the UK.
This restructure will not affect legal, ownership, voting and capital distribution rights in Shell, the firm says, and shares will continue to be listed in Amsterdam and London as well as in New York through the American Depository Shares programme.
Shell’s first board meeting was held on December 31, with the company’s name change expected to take place in the week commencing January 24, 2022.
Trading in the company’s dual A and B shares on the Amsterdam, London and New York stock exchanges will cease in late January 2022 and shares will be assimilated into a single line of ordinary shares on January 29. Dealings in these ordinary shares will then commence from January 31, 2022.
Although incorporated and tax resident in the UK, the company will nevertheless continue to maintain a considerable physical presence in the Netherlands, with its Projects and Technology division, global Upstream and Integrated Gas businesses and renewable energies hub to remain located in The Hague.
Shell is also involved in wind projects off the Dutch coast, has decided to build a biofuels plant, and will participate in a carbon capture and storage project in the Netherlands.
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