Shell to scrap dual listing and shift tax residence to UK

The current complex share structure is subject to constraints and may not be sustainable in the long term, it said, as it announced its plan to focus its listing in London

Royal Dutch Shell said on Monday it would scrap its dual share structure and shift its tax residence and head office to Britain from the Netherlands, seeking to keep investors on board as the energy giant plans a shift away from oil and gas.

The Anglo-Dutch company, which for years faced questions from investors about its complex dual listing, also expects to drop “Royal Dutch” from its name. It will become Shell Plc.

The Anglo-Dutch firm has been in a long-running tussle with the Dutch authorities over the country's 15% dividend withholding tax, which Shell sought to avoid paying with its two share classes. Its new single structure would resolve that issue and allow Shell to strike swifter sale or acquisition deals.

The current complex share structure is subject to constraints and may not be sustainable in the long term, it said, as it announced its plan to focus its listing in London.

The Dutch government said on Monday it was "unpleasantly surprised" by Shell's plans to move to London from The Hague.

The decision will, however, be seen as a vote of confidence in London after Britain's exit from the European Union (EU) triggered a shift in billions of euros in daily share trading from the UK capital to Amsterdam.

The company’s shares, which will still be traded in Amsterdam and New York under the plan, had climbed up 2.1 per cent in London by 9.04 am after the news.

The move requires at least 75 per cent of votes by shareholders at a general meeting to be held on December 10th, Shell said.

We see merits in the proposed restructuring of Shell’s shares structure and tax residence. Among other benefits, the proposed changes will increase Shell’s ability to buy back shares, Jefferies said in a research note.