Shareholders must comment on these modifications on December 10, the company clarified in a statement.
The news came as “an unpleasant surprise” for the Dutch government, which said it “deeply regrets” the decision, according to the Minister of Economic Affairs, Stef Blok, through his Twitter account.
“We are in negotiations with Shell about the implications of this decision for jobs, key investments and sustainability,” Blok added.
Modifications also include creating a unique series of actions. Until now, the group traded in class A and class B shares. The measure requires at least 75% of the votes of shareholders at a general meeting to be held on December 10, Shell said.
Yesterday this announcement made the main headlines of the Dutch press, which also assured that it regrets the loss of another large company of that nationality. It’s a similar case to Unilever, another Anglo-Dutch group whose shareholders in the Netherlands had voted in late 2020 for a London-based single parent company, in a post-Brexit political context.
In return, on the British side, the Minister of Business and Energy, Kwasi Kwarteng, welcomed this “clear vote of confidence in the economy” of the United Kingdom.
The company justified the measure to “simplify the shareholding structure” and “strengthen Shell’s competitiveness”, to the benefit of both shareholders and the group’s environmental objectives. Its shares will continue to trade in Amsterdam, London and New York.
The group wants to “accelerate distributions” to its shareholders through its share purchase program.
The move follows a major overhaul that Shell completed this summer as part of its strategy to move from oil and gas to renewables and low-carbon energy. The review included thousands of job cuts around the world.
The operation “will make the company easier to manage, but it should not have a great impact on its performance,” said Laura Hoy, an analyst at Hargreaves Lansdown.
The impact for shareholders “will surely be positive, but the future of the group continues to depend a lot on the price of oil,” he added.
At the end of October, an “activist” investment firm, Third Point, had called for Shell to be dismantled, denouncing a contradictory strategy between hydrocarbons and the energy transition.
But “it seems unlikely” that Shell’s announcements will respond to Third Point calls, according to Interactive Investor analyst Richard Hunter, who recalled that the fund called for dividing historical exploration, refining and chemicals activities from activities related to low carbon energies.
“Shell is proud of its Anglo-Dutch heritage, will continue to be a major employer and will maintain a significant presence in the Netherlands,” the company said in its statement.
The multinational has set a goal to cut its greenhouse gas emissions by half by 2030, compared to their 2016 levels, at its facilities and for the energy it buys elsewhere.
This decision followed a May ruling by a Dutch court ordering the group to cut its emissions by 45% by 2030. Shell filed an appeal. But this strategy applies “regardless of our tax residence,” Shell said.
Royal Dutch Shell received a severe setback in October with losses in the third quarter, due to a massive accounting burden.
Reuters and AFP agencies