Economy and Energy Minister Kwasi Kwarteng claimed that Shell’s move plan was “a clear vote of confidence in the UK economy”.
The Dutch government has made a desperate attempt to keep Royal Dutch Shell in the Netherlands by abolishing a dividend tax cited by the oil company as the reason for simplifying its stock listing and relocating its tax residence to the UK.
Mark Rutte’s transitional government is seeking parliamentary support to abolish a 15 percent withholding tax, a long-term source of pain for Shell and Anglo-Dutch company Unilever, the Financial Times reported.
It comes shortly after Shell announced a major overhaul of its business, dropping the first two words in the name and relocating tax domicile to the UK.
Shell boss Ben van Beurden has cited the tax, which effectively prevents the company from buying back shares for its UK-listed shares, as the reason for the departure.
The company, which insisted not to give up the Netherlands, said it would no longer qualify for the Royal Dutch designation after the proposed changes.
Board meetings will be held in the UK and Shell’s board of directors and chief financial officers will now be based in the country.
It also plans to ditch its slightly confusing dual-share structure to “increase the speed and flexibility” of its payouts to shareholders. In London today, shareholders can buy an A-share or a B-share of Shell.
Merging these categories of stocks would make the company “easier for investors to understand and value,” added Shell.
It will reverse a structure the company adopted in 2005 when Shell abandoned its dual publicly traded structure in the UK and the Netherlands and merged under a group with a dual share structure, incorporation in the UK and Dutch tax residency.
“It was not intended at the time of the merger that the current A / B share structure would be permanent,” said Shell.
Shell Chairman Sir Andrew Mackenzie said, “This will put Shell in a better position to seize opportunities and play a leading role in the energy transition.”
But the move will cost Shell its royal designation, which the company and its predecessors have held for more than 130 years.
Economy and Energy Minister Kwasi Kwarteng welcomed the announcement by Shell and tweeted that it was “a clear vote of confidence in the British economy”.
Shareholders will be able to vote on the proposals next month.