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Shell to end going Dutch and unite

THE BUSINESS: Shell to end going Dutch and unite

Sunday 26 June 2005

By: Richard Orange June 26, 2005

THIS Tuesday, Royal Dutch/Shell’s management team go their separate ways. Chairman Jeroen van der Veer is off to The Hague, taking with him refining head Rob Routs and gas chief Linda Cook. Exploration head Malcolm Brinded stays in London, bringing along retiring chairman Lord Oxburgh.

Management might act as one when deciding on what terms to accept for one of the company’s multibillion dollar mega-projects, as the company has always claimed, but each director is subservient to the board of one half or other of the separate listed arms of Royal Dutch Petroleum and Shell Transport and Trading.

Next week they will stand before their two separate sets of shareholders, in meetings staggered by half an hour, with a different set of annual meeting resolutions, organised under different national laws.

But this is the last time. Their mission is to persuade shareholders to tie the knot. It should be a cinch. There are potential objections to the marriage: UK holders of Royal Dutch shares, alone among the company’s investors, are at risk of big penalties. There are also anomalies. For Shell Transport and Trading holders, the vote is final. But Royal Dutch holders have until 18 July to accept or not; the peculiarities of Dutch law may mean a tiny rump of Royal Dutch shareholders could be left lingering for months once the unified company lists.

But the anomalies only underline the need to do it.

The merger was agreed in 1907 but never consummated. Doing so now will not give Shell any more barrels in the ground but the added clarity and accountability as well as the ability to use the shares as paper currency in deals will make the company’s recovery easier.

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