Shell, the oil giant, announced today that it is moving its UK headquarters to London and will drop the “Royal Dutch” from its name. This was the first change in its history for 130 years.

Kwasi Kwarteng, the business secretary, described this decision as “a clear vote of confidence” in British economic and will help to create jobs. Each year, the firm has paid hundreds of millions in taxes. These will now be sent to Treasury.  

Meetings of Board members at what is now known as “Shell Plc” will be held in Britain. Chief executives and financial bosses, however, will continue to be based here.

These plans are coming after Unilever, a consumer goods company that is headquartered in the UK, became a British-owned business at the end last year following a merger between its UK and Dutch corporate entities. 

Board meetings at what will now be known as 'Shell Plc' will be held in Britain, while the chief executives and finance bosses will be based in the country from now on

Meetings of what is now known as “Shell Plc” will take place in Britain. Chief executives and financial bosses, however, will continue to be based here.

Business secretary Kwasi Kwarteng welcomed the announcement this morning

Kwasi Kwarteng, business secretary, welcomed this announcement. 

Shell is currently locked in a lengthy dispute with Dutch authorities about the 15% dividend withholding taxes. Shell tried to avoid having to pay this tax with its two share classes. The new structure will resolve this issue.

This decision was also taken in response to pressure from activists in the Netherlands that the company reduce its harmful emission.

A Dutch court ordered Shell in May to increase its greenhouse gas emissions cuts to comply with the Paris Climate Agreement. This agreement aims to limit global warming below 1.5C.

Shell said today’s decision would not affect the legal proceedings. It also stated that they will appeal.

With Economic Affairs Minister Stefblok declaring that the Dutch government was shocked by the news, fury erupted. It is deeply regrettable that the cabinet made this decision.

We are currently in negotiations with Shell to discuss the consequences of this decision for job creation, crucial investment decisions, sustainability and other issues. Blok said that these are crucial.

Shell claimed it wasn’t abandoning the Netherlands. It also said that the Royal Dutch classification would not be extended to Shell following the changes.

Today, shareholders in London can purchase an A or B share of Shell. Shell explained that it would make the company easier for investors to comprehend and more valuable if these two share categories were combined.

This will be a reverse of the arrangement that Shell adopted when it abandoned the dual-listed structures in the UK, the Netherlands and other countries in 2005.

The two armies were instead merged under one group with a dual share structure, incorporation in UK and Dutch tax residency.

Shell explained that it wasn’t planned for permanent A/B shares to exist at unification.

Sir Andrew Mackenzie is the chair of the company. He stated: “The simplification will normalise and improve our share structure in tax and legal jurisdictions within a single country. It will also make us more competitive.

“Shell will therefore be more well-positioned to take advantage of opportunities and lead the energy transition.

“At a moment of unprecedented industry change, it’s more crucial than ever that we have an enhanced ability to accelerate our transition to a less-carbon global power system.

It added that shares will be continued to be listed in New York, London, and Amsterdam.

Today, they rallied by 2% in London but plummeted in Amsterdam.

Kwasi Kwarteng tweeted, ‘Welcome to news that Shell has proposed to relocate its Group headquarters to the United Kingdom under their plans for accelerating the transition to renewable energy.

“A strong endorsement of the British economy’s ability to attract investment, strengthen competition and create new jobs.

ABP, the largest Dutch pension fund said last month that it will stop investing in fossil fuel companies.

This is the result of Daniel Loeb’s New York-based hedge funds Third Point taking a stake at Shell in order to push for change.

Third Point called for a dissolution of Shell and the announcement today does not hint at such a strategy, said Russ Mould (investment director at AJ Bell).

He said that having one tax and legal domicile could increase the speed of movements by reducing financial and legal complexity in acquisitions, dispositions, returns to investors, or fundraisings. 

Stuart Joyne from Redburn, a share research company said that this would allow Shell to buy back more shares and align Shell’s tax residence with the United Kingdom’s country of incorporation. The UK has won this clear victory after Brexit.

Adam Matthews (chief responsible investment officer of Church of England’s pensions board) stated: “If this decision allows the company be more agile in order execute its transition towards net zero, then that should be taken positively.

“We’d love to see how the new approach will help the company make a bolder transition, in keeping with all the other steps it still needs to go.”

Friends of the Earth argued that Shell’s decision to relocate would not have any impact on its court case and force the company into reducing emissions.