After the oil giant Shell announced that it would relocate to London and lose its name as “Royal Holland” in its corporate reforms, it triggered a political struggle over the location of its headquarters, which angered the United Kingdom. Netherlands.
The British government sees this as a vote of confidence in the city after Brexit LondonThe largest oil company in Europe said it will abandon the complex dual-shareholding structure and move its headquarters and tax residence to the UK.
However, the plan was disappointed in the Netherlands, and politicians said they were “unpleasant surprises” about the company’s decision to abandon its headquarters in The Hague-a move that would cost Dutch taxpayers a heavy price.
For the first time in more than 130 years, Shell no longer meets the conditions of the Netherlands and is unable to obtain the title of “Royal”. This change will be submitted to shareholders for voting next month, while at the same time formulating a broader plan to simplify its ownership structure.
Announced in the context of Dutch political uncertainty and the yet-to-be-formed government Elections earlier this yearIt is understood that politicians from multiple parties are frantically talking about how to change Shell’s ideas.
A source familiar with the situation said that Prime Minister Mark Rutte, who is expected to extend his 11-year term, is exploring a proposal to abolish the 15% dividend tax, and Shell listed it as one of the reasons for his departure.
It is understood that the discussion is still in its early stages, and politicians have not yet received approval from colleagues before reaching an agreement with potential alliance partners.
Rutte’s coalition government previously abolished taxes in 2017 and has long been a source of frustration for Shell and the Anglo-Dutch joint company Unilever. However, the plan was abandoned after strong political opposition because Unilever decided to move its headquarters from Rotterdam to London.
It is understood that the British “Financial Times” reported for the first time the negotiations to abolish the dividend tax because it was believed that action must be taken now to appease Shell, even if it means taking action before the establishment of a new government.
British Secretary of Commerce Kwasi Kwarteng welcomed Shell’s relocation proposal on Twitter and said it was part of the company’s plan to transform into a clean energy supplier.
“In our efforts to enhance competitiveness, attract investment and create jobs, we have cast a clear vote of confidence in the UK economy,” he said.
Welcome news @shell As part of a plan to accelerate the transition to clean energy, the company proposed to move its group headquarters to the United Kingdom. While we strive to enhance competitiveness, attract investment and create jobs, we will cast a clear vote of confidence in the UK economy🇬🇧
-Kwasi Kwarteng (@KwasiKwarteng) November 15, 2021
Shell’s market valuation is more than £125 billion, and the move to choose the UK as its only home in Westminster is considered a post-Brexit coup because it appeared earlier this year Amsterdam has surpassed London As Europe’s largest stock trading center, it is largely a symbolic blow.
As part of the changes announced to the stock exchange on Monday morning, Shell’s chief executive Ben van Beurden and chief financial officer Jessica Uhl will move to London, where the company’s board meeting will be held.
According to the details of the plan, the company intends to cancel the dual share structure that divides shares into Class A and Class B listed on the London and Amsterdam stock exchanges. However, it will continue to trade in the Amsterdam, London and New York markets. The company said that this change will enable Shell to return more cash to shareholders, including through share repurchases, because it will target larger common shares. Currently, the structure only allows approximately US$2.5 billion (£1.8 billion) per quarter
This move is a few months later Dutch court ruling Shell must reduce its carbon emissions by 45% by 2030 relative to 2019 levels. The landmark case brought by environmental organizations and more than 17,000 Dutch citizens only applies to the Netherlands. Shell confirmed in July that it will appeal the ruling.
Shell insists that it will continue to be an “important employer” in the Netherlands and plans to have a “main business” in the Netherlands. It added that certain parts of its business, including its project and technology department and the renewable energy center, will remain in The Hague.
After the announcement, Shell’s London-listed A shares rose 2.1% to 16 pounds on Monday. Its “B” class shares closed up 1.2% to 16.80 pounds.
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After Wall Street investor Daniel Loeb (Daniel Loeb) led the US hedge fund Third Point, it took steps to simplify its shareholding structure. Take a stake in the company and start to drive change, Including potential breakups. The third point once accused Shell of having “a set of incoherent and conflicting strategies, trying to appease multiple interests, but not satisfying any interests.”
Shell Chairman Sir Andrew Mackenzie said the reforms are aimed at simplifying business. “This will normalize our shareholding structure within the tax and legal jurisdiction of a single country, and make us more competitive. Therefore, Shell will be better able to seize opportunities and play a leading role in the energy transition. Shell Board of Directors It is unanimously recommended that shareholders vote in favor of the proposed resolution.”
Shareholders will be required to vote on these changes on December 10.
