Simplified Share Structure
Shell has announced a proposal to amend its Articles of Association. This will enable a simplification of its share structure and an increase in the speed and flexibility of capital and portfolio actions.
The Board unanimously believes that the Simplification will strengthen Shell’s competitiveness and accelerate both shareholder distributions and delivery of its strategy to become a net-zero emissions energy business.
The Simplification, announced on 15 November 2021, entails:
- Establishing a single line of shares to eliminate the complexity of Shell’s A/B Share Structure; and
- Aligning Shell’s tax residence with its country of incorporation in the UK, where it will hold Board and Executive Committee meetings, and locate its chief executive and chief financial officer.
Shell has published a circular which contains further details of the Simplification and the proposed amendments to the Articles of Association.
A General Meeting has been scheduled to be held at Rotterdam Ahoy, Ahoyweg 10, 3084 BA Rotterdam, the Netherlands at 10:00 (Dutch time), 09:00 (UK time) on Friday December 10, 2021.
Chair of the Board on simplified share structure
ROYAL DUTCH SHELL PLC
SHELL PROPOSES SIMPLIFIED STRUCTURE
ANDREW MACKENZIE, CHAIR OF THE BOARD OF ROYAL DUTCH SHELL PLC
Hello, everyone. I'm Andrew Mackenzie, I'm Chair of the Board of Royal Dutch Shell. Today, the Board announced a proposal to amend Shell's Articles of Association. This will simplify the company's share structure and bring it in line with other companies so as to increase its capital and portfolio flexibility. The simplification will make Shell more competitive, it will allow for an acceleration in shareholder distributions and speed up Shell's transition to a net-zero emissions energy business.
Under the proposal, Shell intends to change its A-B share structure to a single line of shares and to change its tax residence to the UK, which is our country of incorporation. It will hold Board and Executive Committee meetings in the UK and relocate its chief executive and chief financial officers there. As a consequence, the Board also proposes to change the company name from Royal Dutch Shell plc to Shell plc.
But some things will remain unchanged. Post-simplification, shareholders will retain the same legal, ownership, voting and capital distribution rights in Shell as they do today. And the company's shares will continue to be listed in Amsterdam, London and New York, with FTSE UK index inclusion. And we expect that AEX index inclusion will be maintained. Shell's corporate governance structure will also remain unchanged. And the simplification will have no impact on legal proceedings related to the Dutch Court ruling. Shell is rising to meet the court's challenge and has recently announced a new absolute emissions reduction target.
At a time of unprecedented change for the industry, it is even more important that we have an increased ability to accelerate the transition to a lower carbon global energy system. This simpler structure will cause Shell to accelerate the delivery of its Powering Progress strategy, while creating value for shareholders, customers and wider society. The Board believes the proposal is in the best interests of the Company and shareholders as a whole and that the benefits of the simplification will outweigh any potential costs associated with it.
The Board has called for a General Meeting on December 10th, 2021 at which the resolution to amend Shell's Articles of Association will be put to a vote. Your support is extremely important to us. The Board and I strongly recommend that Shell's shareholders vote in favour of the simplification. Thank you.
Royal Dutch Shell plc
November 15, 2021 www.shell.com/investors
DEFINITIONS AND CAUTIONARY NOTE
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this presentation "Shell", "Shell Group" and "Group" are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words "we us" and "our" are also used to refer to Royal Dutch Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. "Subsidiaries "Shell subsidiaries" and "Shell companies" as used in this presentation refer to entities over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as "joint ventures" and "joint operations", respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as associates". The term "Shell interest" is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.
This presentation contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Shell to market risks and statements expressing management's expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as "aim", "ambition anticipate "could" estimate expect" goals" intend", "may", "milestones", "objectives outlook", "plan", "probably", "project", risks" "schedule" should", "target", "will" and similar terms and phrases. There are a number of factors that could affect the future operations of Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell's products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, judicial, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; (m) risks associated with the impact of pandemics, such as the COVID-19 (coronavirus) outbreak; and (n) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell plc's Form 20-F for the year ended December 31, 2020 (available at www.shell.com/investors and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this presentation and should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, November 15, 2021. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. The content of websites referred to in this presentation does not form part of this presentation. We may have used certain terms, such as resources, in this presentation that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.
Watch this short video where Sir Andrew Mackenzie, Chair of the Board of Royal Dutch Shell, explains the reasons for proposing and benefits of a simplified structure.
Simpler. More flexible. Faster.
A conventional single share structure will allow Shell to compete more effectively. It will:
- Allow for an acceleration in distributions by way of share buybacks, as there will be a larger single pool of ordinary shares that can be bought back. Following the start of a $2 billion buyback programme in July, Shell announced in September that it will return an additional $7 billion to shareholders following completion of the sale of its Permian assets in the United States.
- Strengthen Shell’s ability to rise to the challenges posed by the energy transition, by managing its portfolio with greater agility.
- Reduce risk for shareholders by simplifying and normalising Shell’s share structure in line with its competitors and most other global companies. The current complex share structure is subject to constraints and may not be sustainable in the long term.
Frequently asked questions
What changes is Shell intending to make to its corporate structure and what are the benefits of the changes?
How is the intended share structure simpler and more efficient than what Shell currently has?
Why does Shell want to make this change now?
Does the Simplification impact shareholders’ ownership rights, the dividend policy, or the size of shareholdings?
What will be the impact on the share price?
What is the cost of the Simplification?
Is Shell changing its Board and/or management team?
Why is Royal Dutch Shell changing its name?
What impact will these changes have on the May 2021 District Court ruling?
What are the next steps and approvals that are required?
What action do I need to take?
Will I receive a new share certificate and for those holding shares via the Royal Dutch Shell Corporate Nominee, will there be any change to the terms and conditions?