Royal Dutch/Shell to become single company
June 28, 2005
RoyalDutch/Shell, the Anglo-Dutch oil company, has secured shareholders approval to merge its dual-ownership structure and create a single company worth £120bn.
The firm is 60% owned by Royal Dutch Petroleum and 40% by Shell Transport & Trading Company. A merger is expected to simplify the management structure – a crisis causing Shell to slash its oil reserves was attributed to problems with management. The company’s new name will be Royal Dutch Shell.
The change marks the end of approximately 100 years of trading as a dual organisation.
The new shares will have their primary listing on the and are scheduled to start trading on July 20.
A market value of over £120bn will place Shell in second place in the FTSE 100 index, behind BP. Shell is currently placed sixth on the index. The company expects its greater size to allow it to improve its competitive edge and lead consolidation in the industry.
Approximately 98% of shareholders in the Netherlands voted in favour of unification and 96% in London.
Analysts expressed concern that the merger will not address the problem that the company is not replacing its reserves of oil and gas quickly enough.
Environmental groups protested outside the shareholder’s meeting in London. Activists complained about continued pollution by the company and its “reckless pursuit of profit”.