Shell announces unification date

Oil giant Shell said today its new era as a unified company will begin on July 20.

It will sweep aside nearly 100 years of history when trading begins in shares of Royal Dutch Shell on that date, fulfilling a pledge to try to eliminate failings that led to its reserves crisis last year.

Assets of the company are currently split on a 60-40 basis between Royal Dutch Petroleum, with its headquarters in The Hague, and London-based Shell Transport.

Unification will mean the group will have a single board and chief executive compared to its present structure of two sets of directors meeting separately in the UK and the Netherlands.

The move was announced in October and still needs the approval of shareholders at meetings on June 28.

But analysts said the merger went a long away to meeting the demands of investors angered by the reserves crisis, which led to three executives being ousted and £82.7m (€120.4m) in fines by US and UK regulators.

Many investors blamed a lack of corporate transparency and accountability for the debacle, which led to Shell downgrading its reserves five times in a year.

Chief executive Jeroen van der Veer said: “We have been encouraged by the widespread support of shareholders since the unification proposals were initially announced in October.”

Royal Dutch Shell would have a market value of £113.6bn (€165.3bn) at current prices to be the second largest constituent of the FTSE 100 Index behind major rival BP. Shell Transport is presently the sixth biggest top-flight firm.

The merger plan also involves the transfer of more than 200 senior jobs across the North Sea, representing 7% of the 3,000 staff who currently work at its London headquarters.

However, Shell has said that its global downstream and trading businesses will remain in the UK.

Included in its final proposals for the unification of the company was a vow to continue with its dividend policy, saying the board will “seek to increase the dividend at least in line with inflation over time”.

Shell will also press ahead with plans to buy back between $3bn (€2.4bn) and $5bn (€4bn) of its own stock this year.