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The passing of national champions

Financial Times: The passing of national champions

“Senior figures from the company even had to approach Queen Beatrix of the Netherlands, to gain her royal assent for the move. It is believed to be the first time the Dutch royal monicker has been applied to a UK-listed company.”

Wednesday 29 June 2005

By Thomas Catan, James Boxell and Ian Bickerton

In a historic vote on Tuesday, Royal Dutch/Shell shareholders bade farewell to a century of history, approving a plan to scrap the UK and Dutch parents of the group in favour of a single, unified company.

The vote had been locked-up with the aid of large investors ahead of Tuesday’s annual general meetings in London and Scheveningen. But the vote did not proceed before a handful of elderly investors in both meetings raised their objections to the passing of what they see as their national champions.

“Shell Transport and Trading is a very important company within the UK and here we have a board prepared to send it over to the other side,” protested James Moorhouse, a former Shell employee and retired member of the European Parliament. “It does a great disservice to the British nation. I have nothing against our Dutch friends, but we have to consider the national interest as well.”

Lord Kerr, a former British diplomat on the board who worked to calm national fears about the union, replied it was in everyone’s interest that Shell streamline its century-old corporate governance structure.

“There’s a Shell interest and a national interest in making sure Shell is optimised for best performance,” he said.

Directors from the UK arm, Shell Transport and Trading, were keen to highlight the fact that the new company, Royal Dutch Shell plc, will be incorporated in the UK and have its primary share listing in London. In the Netherlands, meanwhile, the Dutch directors highlighted the fact that the new company will be headquartered in the Hague.

Shell executives have worked for months to overcome the objections of the UK and Dutch factions within the company and assuage national sensitivities. One senior company official said the decision to headquarter the company in the Netherlands was partly influenced by such internal political considerations.

“It becomes a UK company headquartered over there. That’s sensible on substantive grounds, [but] also has a political dimension to it,” the official said. “For some people in the Netherlands, seeing by far the largest company in the Netherlands become a plc with its primary listing London is quite a difficult issue.”

As well as internal politics, Shell executives had to consider the geopolitical ramifications of any changes to the company’s national identity. “Oil is a political business with big P and small p,” one adviser said. “The company felt that if it went off into remote parts of the world it needed the backing of the UK and Dutch governments.”

Senior figures from the company even had to approach Queen Beatrix of the Netherlands, to gain her royal assent for the move. It is believed to be the first time the Dutch royal monicker has been applied to a UK-listed company.

The British government was also consulted on the move, according to people who worked on the deal.

Such political considerations are hardly new. They have been central to Royal Dutch/Shell ever since the two companies joined forces in 1907. Shell executives directed advisers to maintain the Anglo-Dutch nationality of the company as much as possible.

“The idea was to try to preserve the Anglo-Dutch heritage in as many ways as possible,” said an adviser who worked on the deal. “There were tax advantages to having HQ in the Hague … To the extent that you needed to pacify political interests in the Netherlands, that clearly served the purpose. Equally, having a UK-listed entity played to [the] UK gallery.”

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