Shell to move HQ to London, in historic shift amid energy transition


Royal Dutch Shell PLC said it plans to consolidate its dual British and Dutch structure and move its headquarters to London, a historic shift the oil giant said would help it navigate the transition to low-carbon energy.

The company said Monday that the plan to end its long-held, complex dual structure was intended to make it easier for investors to value the company, help it facilitate returns to shareholders and make it simpler to amend its portfolio of assets.

The company said that under its plan, its headquarters would be in the U.K., rather than the Hague, and that its chief executive and board meetings would relocate to Britain. It will also take up tax residence in the U.K., rather than the Netherlands. The restructuring would also result in a name change, the oil major said, to just Shell, dropping the Royal Dutch designation it has held for more than 130 years.

The proposal, which is set to be put to a shareholder vote next month, comes at a time when Shell faces increasing pressure from both investors and environmental groups over its carbon emissions.

Just weeks ago, activist investor Third Point LLC said it had built a stake in Shell and called for the breakup of the company to improve its environmental and financial performance. Shell has since defended its business model, saying its strategy and customers were best served by retaining its collection of assets and that its legacy oil-and-gas operations were needed to fund its investments in lower-carbon energy. Third Point didn’t address Shell’s share structure in its note to its own investors, in which it contemplated possible improvements to the company.

Shell has also come under pressure from longstanding shareholders. Last month one of the world’s largest pension funds ABP, based in the Netherlands, said it would sell its positions in fossil fuels companies, including Shell, by 2023. At the time, Shell said that it hadn’t been warned about ABP’s decision and only learned about it from the media.

Separately, a Dutch court in May, ruling on a case brought by environmental groups, said Shell should move faster to cut its emissions. The company is appealing the verdict, saying it had been unfairly singled out. Nevertheless, Shell said last month that it would halve its carbon-dioxide emissions from its operations by the end of the decade compared with 2016 levels, a move that would address part of the court ruling.

Shell said Monday that moving its headquarters from the Hague to London wouldn’t impact the Dutch court case. In October, Shell Chief Executive Ben van Beurden told reporters that the company couldn’t run away from the court case. “Nor do we have any intention to run away from it,” he said. “If we were to relocate to any other country the verdict would simply follow us in terms of enforcement.”

Friends of the Earth Netherlands, who brought the case, said Monday that in its view the headquarter’s move had no implications for its case, or future court cases at home and abroad.

The plan announced Monday is the first major change to Shell’s structure since the 2005 unification of its two legacy companies under a single parent company. Since then it has had two lines of shares, an A and a B share, a structure which it said Monday was never intended to be permanent.

Shell’s proposed restructuring follows a similar move from Unilever PLC in recent years. The Dove soap maker last year consolidated its dual British and Dutch structure into a single company based in the U.K. The consumer-goods giant had initially planned to have its headquarters in the Netherlands but changed tack after a revolt by some of its British investors.


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