* Shell says new structure to speed up payouts
* Dutch court ordered Shell to accelerate energy shift
* 'Royal Dutch' to be dropped from name
(Updates with report government again trying to scrap dividend
tax)
By Shadia Nasralla and Sachin Ravikumar
LONDON, Nov 15 (Reuters) - Royal Dutch Shell said
on Monday it would scrap its dual share structure and move its
head office to Britain from the Netherlands, pushed away by
Dutch taxes and facing climate pressure in court as the energy
giant shifts from oil and gas.
The company, which long faced questions from investors https://www.reuters.com/business/energy/2-reaction-shell-scrapping-dual-share-structure-2021-11-15
about its dual structure and had recently been hit by a Dutch
court order over its climate targets, aims to drop "Royal Dutch"
from its name - part of its identity since 1907 - to become
Shell Plc.
The firm has been in a long-running tussle with the Dutch
authorities over the country's 15% dividend withholding tax on
some of its shares, making them less attractive for
international investors. Shell introduced the two-class share
structure in 2005 after a previous corporate overhaul.
The new single structure with all shares under British law
means none of its shares would be under this tax. It would also
allow Shell to strike swifter sale or acquisition deals.
In a further knock to its relations with the Netherlands,
the biggest Dutch state pension fund ABP said last month it
would drop Shell and all fossil fuels from its portfolio.
The Dutch government said on Monday it was "unpleasantly
surprised" https://www.reuters.com/article/shell-structure-netherlands-minister/update-1-dutch-government-unpleasantly-surprised-by-shell-hq-move-to-britain-idINL1N2S60KE
by Shell's plans to move to London from The Hague.
In a political long-shot, Dutch Economic Affairs Minister
Stef Blok contacted the heads of political parties in parliament
on Monday to gauge support for scrapping the dividend tax,
broadcaster RTL reported.
The government was forced to withdraw the same plan in 2018
following widespread opposition to the move, which was seen by
the public as a gift to foreign shareholders.
Shell's decision will, however, be seen as a vote of
confidence in London after Britain's exit from the European
Union triggered a shift in billions of euros in daily share
trading from the UK capital to Amsterdam.
Shell's shares, which will still be traded in Amsterdam and
New York under the plan, climbed more than 2% in London on
Monday morning after the news.
"The current complex share structure is subject to
constraints and may not be sustainable in the long term," Shell
said, as it announced its plan to change the structure.
The dual structure means Shell now has primary listings in
both London and Amsterdam, as well as two overarching legal
headquarters despite operating as one economic group.
Such set-ups are expensive and complex, requiring the
replication of board-level functions in two jurisdictions as
well as being incorporated under two different legal regimes.
The change requires at least 75% of votes by shareholders at
a general meeting to be held on Dec. 10, the company said.
"Among other benefits, the proposed changes will increase
Shell's ability to buy back shares," Jefferies said in a
research note.
Shell has said it would return $7 billion from selling U.S.
assets to ConocoPhillips in addition to an ongoing share
buyback programme.
'MORE AGILE'
Monday's move follows a major overhaul Shell completed this
summer as part of its strategy to shift away from oil and gas to
renewables and low-carbon energy. The overhaul included
thousands of job cuts around the world.
In May, a Dutch court ordered Shell to deepen its planned
greenhouse gas emission cuts in order to align with the Paris
climate deal which aims to limit global warming to 1.5 degrees
Celsius. Shell has said it would appeal.
"If this decision will enable the company to be more agile
in order to execute its transition to net zero, then it should
be viewed positively," said Adam Matthews, chief responsible
investment officer at Church of England Pensions Board, a Shell
shareholder.
Matthews, who is leading talks with Shell on behalf of the
investor group Climate Action 100+, said it should not remove
Shell's responsibility to implement the Dutch court ruling.
Shell said the change would not change the impact of the
court decision.
Shell is also battling calls made last month from activist
investor Third Point for the firm to be broken up into multiple
companies. Shell's top executives hit back, saying the firm's
businesses worked better together.
Corporate giants are under growing pressure to simplify
their structures with General Electric, Toshiba
and Johnson & Johnson announcing plans last week to
split into separate companies.
Dual listings, which are more expensive to maintain, are
also falling out of favour.
Consumer products giant Unilever abandoned its dual
Anglo-Dutch structure last year in favour of a single
London-based entity. Miner BHP Group has also called
time on such a structure.
If BHP and Shell complete their shifts to single share
structures, Rio Tinto, Carnival and Investec
will be the few remaining dual-listed companies on
London's main market.
(Reporting by Sachin Ravikumar in Bengaluru and Shadia Nasralla
in London, additional reporting by Rachel Armstrong; Editing by
Shounak Dasgupta, Edmund Blair and Marguerita Choy)
