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City comment: Shell doesn’t go Dutch to avoid Unilever’s Marmite mistake

·1-min read
Shell is committing to London  (PA Wire)
Shell is committing to London (PA Wire)

Fancy going Dutch? Not Ben van Beurden.

Shell is ending its dual-class share structure and the awkward cross-Channel splits it has being doing between London and The Hague.

Investors cheered today’s restructure. It makes Shell an easier beast to understand: always good news.

The decision is a win for post-Brexit London: the capital’s large institutional investor base still can’t be matched in Europe. Being closer to the big money still means London even with Britain outside of the EU.

Still, it can’t have been an easy decision.

Shell CEO van Beurden, a Dutchman, is leaving his homeland as part of the restructure. Moving is stressful at the best of times, let alone changing countries. My thoughts are with Ben.

He likely studied the case of Unilever, another Anglo-Dutch business that tried to rationalise its structure a few years ago. The Marmite maker announced plans to shift its headquarters to the Netherlands but was forced to abandon them after outcry from shareholders. Institutions complained they could be forced to sell shares and said there was little upside. Unilever boss Paul Polman left just a few months later. A cautionary tale.

While today’s update delivers some cheer, van Beurden’s big challenges remain the same: shifting Shell from dirty oil to green energy and heading off a noisy activist investor pushing for a break-up of the business.

That’s a full in-tray for any CEO whether his office is in London or The Hague.

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