Shell to scrap dual share structure, as it battles activist investor

Royal Dutch Shell will scrap its dual share system in favor of a single class of shares to boost shareholder payouts and simplify its structure, it said on Monday, as the energy giant battles calls from an activist investor to split up.

The company, which has set targets to gradually shift from hydrocarbons, expects to drop “Royal Dutch” from its name and be called Shell Plc. It also plans to move its tax residence to Britain, its country of incorporation, from the Netherlands.

The moves come weeks after hedge fund Third Point disclosed a large stake in Shell, calling on the oil and gas major to split into multiple companies to increase its performance and market value. Shell hit back, with top executives saying its businesses operated better together than apart.

Shell, along with other European oil majors, has set targets to move away from oil production while investing in non-fossil energy sources like solar and wind power.

Shell’s move to a single class of shares would create a larger single pool of ordinary shares that can be bought back by the company, it said. Shell shares will continue to be listed in Amsterdam, London and New York.

“The simplification is designed to strengthen Shell’s competitiveness and accelerate both shareholder distributions and the delivery of its strategy to become a net-zero emissions business,” Shell said.

“The current complex share structure is subject to constraints and may not be sustainable in the long term,” it said.

The moves require at least 75% of votes by shareholders at a general meeting to be held on Dec. 10, Shell said.

Last year, consumer products giant Unilever abandoned its dual Anglo-Dutch structure in favor of a single London-based entity.