Explosive group move: Shell is also leaving the Netherlands

The Netherlands is also losing its second bi-national industrial giant.

The Dutch-British oil company Shell wants - much like Unilever a year ago - to give up its dual structure and move entirely to London.

This is where the tax domicile is to move, where CEO Ben van Beurden and CFO Jessica Uhl are said to be based.

The seat in The Hague is left behind.

Politicians are taken by surprise: the cabinet is “unpleasantly surprised”, said the acting Minister for Economic Affairs Stef Blok from the right-wing liberal VVD party of Prime Minister Mark Rutte.

Klaus Max Smolka

Editor in business.

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Thus, within a short time, an internationally known group of companies leaves the country, which for many years had topped the list of the heaviest members in the Dutch leading index AEX, which comprises 25 values. Shell argued that a unified share structure would make buybacks easier for the company and its role in the energy transition. The shareholders are due to vote on the plan on December 10th. Both the “Royal” and the “Dutch” are omitted from the official name “Royal Dutch Shell”: the company then operates as “Shell”.

The decision is made against the background of growing criticism in the Netherlands that large corporations are giving too little back to society.

The fifth largest economy in the EU is known for its business-friendly policies.

It is not for nothing that many international corporations choose their headquarters here.

On the one hand, this has to do with the excellent infrastructure, including Schiphol Airport, and with well-trained specialists with a good command of English.

On the other hand, rules for minimizing taxes - which have been much criticized internationally - are an invitation.

"Nothing is permanent"

In the Unilever and Shell cases, the tax also plays a role, albeit a different aspect: namely a dividend tax, which does not exist in the UK. Rutte had planned to abolish this tax in 2017 - which should keep the food and detergent company Unilever, which is toying with emigration, in the country. Originally, Unilever actually chose Rotterdam as its single seat, but British shareholders opposed this because the share threatened to fall out of the leading London index, the FTSE 100. Then the two most powerful men on the board of directors resigned, Chairman Paul Polman and Chairman of the Supervisory Board Marijn Dekkers - both Dutch. They were followed by a Briton, the Scot Alan Jope, and the Dane Nils Andersen.According to corporate circles, this prepared the leap to London - which turned out to be true.

The approach met with a lot of criticism in the Netherlands - where the behavior of large corporations and their managers is viewed critically anyway. This has not escaped the employer's organization VNO-NCW. The recently analyzed social trends in the country. “We also saw that there is a negative mood towards companies - a bit like in the 1970s,” said VNO-NCW chairwoman Ingrid Thijssen in a conversation with the FAZ in The Hague in March. The organization also expressed disappointment on Shell's decision on Monday. "This is an enormous bloodletting for the Netherlands," it said. This worsens the location climate.

In the Shell case, the first shares in the Dutch branch (in Amsterdam) and the British branch (in London) were both issued at the end of the 19th century. In 1907 the two companies Koninklijke Olie and Shell Transport and Trading entered into a close cooperation without completely merging. The current dual structure of the company was only created in 2005, although there were still two types of shares.

After Unilever's decision, there were fears that Shell might follow suit. Van Beurden spoke of an option last year. “You always have to think about things. Nothing is permanent, and of course we look at the climate for the site conditions, ”he told the business newspaper FD (Financieele Dagblad). "But relocating a control center is not a trivial measure, it shouldn't be done lightly."

It seems obvious that tax treatment played a role in the “location conditions”. Meanwhile, the climate of opinion is increasingly toxic. In the course of the climate debate, the group is viewed even more critically in the media. In May, the environmental organization “Milieudefensie” achieved a sensational partial victory against the group: The district court in The Hague ordered Shell to reduce its net emissions by 45 percent by 2030, more than according to its own previous plans.

Last month, the Netherlands-based largest European pension fund ABP made a U-turn and announced that it would sell all oil, gas and coal stocks, including a multi-hundred million euro package to Shell.

There is also a new opponent abroad: The activist shareholder Daniel Loeb with his American company Third Point is calling for the oil company to split up: essentially into a company for fossil fuels and one for renewable energies.