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HomeFinanceSimpler, more flexible, faster: Shell announces simplified share structure

Simpler, more flexible, faster: Shell announces simplified share structure

The Board of Royal Dutch Shell announced a proposal to simplify the company’s share structure to increase the speed and flexibility of capital and portfolio actions. The simplification is designed to strengthen Shell’s competitiveness and accelerate both shareholder distributions and the delivery of its strategy to become a net-zero emissions business.

“At a time of unprecedented change for the industry, it’s even more important that we have an increased ability to accelerate the transition to a lower-carbon global energy system,” said Shell’s Chair, Sir Andrew Mackenzie. “A simpler structure will enable Shell to speed up the delivery of its Powering Progress strategy while creating value for our shareholders, customers and wider society.”

Shell has been incorporated in the UK with Dutch tax residence and a dual share structure since the 2005 unification of Koninklijke Nederlandsche Petroleum Maatschappij and the Shell Transport and Trading Company under a single parent company. Now the company intends to change its share structure to establish a single line of shares, which is simpler for investors to understand and value. It will also align its tax residence with its country of incorporation in the UK.

A conventional single share structure will allow Shell to compete more effectively. In particular, it will strengthen its ability to rise to the challenges posed by the energy transition, by managing its portfolio with greater agility.

Still, Shell is proud of its Anglo-Dutch heritage. Thus, its Projects and Technology division, global Upstream and Integrated Gas businesses and renewable energies hub remain located in The Hague. Shell’s growing presence in wind projects off the Dutch coast, recent decision to build a world-scale low-carbon biofuels plant at the Energy and Chemicals Park Rotterdam, plan to build Europe’s biggest electrolyser in Rotterdam and its intention to participate in the Porthos carbon capture and storage project, all underline the importance of the Netherlands to the company’s energy transition activities.

Also, carrying the Royal designation has been “a source of immense pride and honour for Shell for more than 130 years,” reads the statement. “However, the company anticipates it will no longer meet the conditions for using the designation following the proposed change. Therefore, subject to shareholder approval of the resolution, the Board expects to change the company’s name from Royal Dutch Shell to Shell.”

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