Shell shareholders set to back move to UK

Shell shareholders on Friday looked set to overwhelmingly back plans to switch the oil giant’s headquarters from the Netherlands to Britain after a century and drop Royal Dutch from the name.

Europe’s biggest energy firm says the move will simplify its tax and share arrangements, and speed up its transition from fossil fuels that cause climate change.

Preliminary results with nearly 58 percent of shares cast showed that 99.78 percent approved the plan, with full results due later Friday, Shell officials said at a general meeting in Rotterdam. The plan needs 75 percent overall majority to pass.

The Dutch government has said it was “unpleasantly surprised” by the plan, while Britain has hailed it as a vote of confidence in the British economy post-Brexit.

“The course we have laid out offers the maximum benefit with the minimum risk for shareholders,” Royal Dutch Shell chairman Andrew Mackenzie told a meeting of shareholders in Rotterdam’s Ahoy stadium.

“We have always been and will continue to be very proud of how important the Netherlands is to our heritage,” he added.

Mackenzie denied the move was motivated by a Dutch court ruling earlier this year that Shell must cut its emissions.

But he admitted a Dutch government decision to drop plans for the scrapping of a dividend tax on big companies was a factor.

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– Blow to Dutch prestige –

Under the plans, Shell will switch its tax residence and top executives including CEO Ben van Beurden from The Hague to London. Its 8,500 staff in the Netherlands will remain.

If backed by shareholders, the plans would have to be formally approved by Shell’s board before coming into effect in 2022.

The loss of the Netherlands’ biggest company would be a major blow for the government, which had positioned itself as a key venue for investment afer Brexit.

It would be the second big firm to depart for London after Unilever last year.

Royal Dutch Shell was formed in 1907 from a merger of Koninklijke Nederlandsche Petroleum Maatschappij and British firm Shell Transport and trading.

The “Shell” name and logo came from seashells imported in the 19th century by the father of Marcus and Samuel Samuel, the brothers who founded the British firm.

But pressure for change has been building, particularly from the activist investor Third Point, which has demanded Shell be broken up, bolster low-carbon investment and return more cash to shareholders.

The landmark court victory for climate activists earlier this year that Shell must slash greenhouse gas emissions also came as a major blow.

– Climate questions –

Several shareholders quizzed the Shell top brass on whether their plans would do enough to address climate change.

Mackenzie insisted the London move would make the company more “flexible” as it transitioned away from fossil fuels, and said it would not “impact” on the court’s decision.

The Shell chairman also sought to play down his comments in November that the company was also “driven to go to the UK” by Dutch Prime Minister Mark Rutte’s decision in 2018 to abandon plans to scrap a tax on big companies’ dividends.

“It is not dominated by considerations about the dividend withholding tax,” he said, adding that there were “many factors” in the decision.

The tax hit to the country from Shell’s departure could amount to billions of euros, local media said. 

In return, the Dutch parliament could insist on a “departure tax” that Shell has previously put at around 400 million euros.

Mackenzie however said he thought there was a “low probability” that Dutch MPs would back such a penalty.