LONDON (AFP) – Energy giant Shell on Monday announced plans to switch headquarters from the Netherlands to the UK and drop Royal Dutch from its name, in a major shakeup that angered the Dutch government.

The plan, hailed by UK Business Secretary Kwasi Kwarteng as ”a clear vote of confidence in the British economy” post Brexit, will see Shell switch its tax residence and top executives to Britain.

The move deprives the Netherlands of its biggest company, which has for more than 130 years been a symbol of Dutch entrepreneurial spirit and is headquartered in The Hague.

”We are unpleasantly surprised by this. The cabinet deeply regrets this intention,” Dutch Economic Affairs Minister Stef Blok said on Twitter.

”We are in talks with Shell about the implications of this move for jobs, critical investment decisions and sustainability. Those are hugely important,” Blok added.

The Dutch business association VNO NCW said: ”This is a huge bloodletting for the Netherlands.”

Shell in a statement said the changes were designed to strengthen the company’s ”competitiveness and accelerate both shareholder distributions and the delivery of its strategy to become a net-zero emissions business”.

It insisted that the plans ”will have no impact on” a Dutch court ruling that the company must slash greenhouse gas emissions.

The legal decision this year was a landmark victory for climate activists, while Monday’s announcement comes after activist investor Third Point demanded Shell be broken up, bolster low-carbon investment and return more cash to shareholders.

Friends of the Earth Netherlands, which helped bring the case, agreed that a Shell move would have ”no effect” on the case and could even lead to other legal action in Britain.

Shell chair Andrew Mackenzie later blamed Shell’s move on a 2018 decision by Dutch Prime Minister Mark Rutte to abandon plans to scrap a tax on big companies’ dividends.

”The reality of looking for the simplification was that the imposition of a withholding tax on dividends here in the Netherlands meant that we were driven to go to the UK,” Mackenzie told an investors conference call.

Shell said it did not expect any major financial effect from relocating, except for a departure tax that could be as high as 400 million euros.

For the Dutch treasury, however, the tax hit from Shell’s departure could amount to billions of euros, local media said.

The Dutch government was now seeing whether there was support in parliament to scrap the dividend tax after all in a bid to persuade Shell to stay, broadcaster RTL reported.

The GroenLinks (Green-Left) party said it would push instead for the ”departure tax”.

”Leaving now? Fine, but then you pay your fair share,” said leader Jesse Klaver.

Shareholders will vote on the planned changes at a meeting in the Netherlands on December 10.

Shell said it plans to relocate to the UK both its chief executive Ben van Beurden and chief financial officer Jessica Uhl.

The company has been incorporated in the UK with Dutch tax residence since 2005.

– ‘Proud’ heritage –

Shell said in Monday’s statement that it ”is proud of its Anglo-Dutch heritage and will continue to be a significant employer with a major presence in the Netherlands”.

The company said its projects and technology division, global upstream and integrated gas businesses and renewable energies hub, with 8,500 employees, would remain located in the Netherlands.

Shares will continue to be listed in Amsterdam, London and New York, it added.

Shell shares rose more than two percent in late afternoon trade on the Amsterdam stock exchange’s AEX index.

Shell’s shakeup comes as the company faces increased pressure from activists on how the company is run with the world moving to net zero emissions targets.

The largest Dutch pension fund, ABP, last month said it would stop investing in all fossil fuel companies.

It comes after Daniel Loeb, founder of New York-based hedge fund Third Point, took a stake in Shell to demand change, although there was no sign of the break-up it demanded.

Shell’s plans come also after consumer goods giant Unilever became a wholly British company last year, U-turning on a plan to base itself in the Netherlands.

At the same time however, Amsterdam’s stock exchange has gained on London’s financial hub following Brexit.

Source: Manila Bulletin (