Shell is exploring ways to simplify its dual Anglo-Dutch structure

Shell is exploring ways to simplify its dual Anglo-Dutch structure
Written by:
Wajeeh Khan
5th July, 11:16
Updated: 5th July, 11:21
  • Shell is exploring ways to simplify its dual Anglo-Dutch structure.
  • Unilever also expressed plans of merging its dual legal structure.
  • Shell is in the process of offloading a few of its stakes in Norway.
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CEO Ben van Beurden of Royal Dutch Shell (AMS: RDSA) said on Saturday that the prospect of the oil major choosing to move its headquarters to the United Kingdom remains on the table. Shell is currently headquartered in the Netherlands. The company has a registered office in the UK but is a tax resident of the Netherlands. In an announcement last week, Shell said it will write down up to £17.90 billion of assets in the second quarter.

Shares of the company closed about 1% down on Friday. At £13.17 per share, Royal Dutch Shell is currently 45% down year to date in the stock market after recovering from an even lower £9.62 per share in March. The company is currently in the process of offloading a few of its stakes in Norway.

Unilever also expressed plans of merging its dual legal structure

Shell’s announcement comes after Unilever that expressed plans of merging its dual legal structure (Anglo-Dutch) into a single UK-based holding company last month. Shell’s Van Buerden, however, did not explicitly state the company’s plans of moving its headquarters and said in an interview with a Dutch newspaper:

“You always need to keep thinking. Nothing is permanent and of course we will look at the business climate. But moving your headquarters is not a trivial measure. You cannot think too lightly about that.”  

CEO’s remarks were confirmed by a Shell spokesman who reiterated that the oil and gas company is committed to exploring ways that can help simplify its Anglo-Dutch structure.

Unilever’s decision was attributed to Dutch Prime Minister Mark Rutte who withdrew from plans of suspending a 15% withholding tax on dividend in 2018.

Shell has been vocal against the withholding tax on dividend

Headquartered in The Hague, Shell has made the required arrangements including two share classes that disable the Dutch government from imposing a dividend withholding tax on payments made to the shareholders of Shell’s former UK-arm.

Following Unilever’s decision, however, the Dutch government is now considering removing the dividend withholding tax again to entice Unilever into exploring Rotterdam as an option to establish its holding company as it moves ahead to collapse its dual legal structure.

Shell has always been vocal against the withholding tax on dividend that it sees as a complication for financing dividends, acquisitions, and share buybacks. Learn more about share buybacks.

Shell performed slightly upbeat in the stock market last year with an annual gain of roughly 5%. At the time of writing, the Anglo-Dutch oil and gas company has a market cap of £99.65 billion and a price to earnings ratio of 13.55.

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