The oil company Shell, one of the crown jewels of the Dutch economy for more than a century, is moving its headquarters from The Hague to London. The Brexiteers triumph.
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The monumental headquarters of Royal Dutch Shell in the heart of The Hague, with its shell-shaped awning and gold-coloured window ornaments, will soon close. The oil company is moving to London, it announced this morning – just before the opening of the stock exchanges. “I realize this is a difficult message,” Dutch CEO Ben van Beurden said in a statement. ‘However, I would like to emphasize that this is necessary. In this way we can play a leading role in the energy transition.’
To say that this message would be difficult is an understatement. The Dutch government, which was only informed a few hours before the public, responded not amused. ‘We were unpleasantly surprised by this,’ said Stef Blok, resigning Minister of Economic Affairs. ‘We are in talks with the top of Shell about the consequences of this intention. Think of jobs, crucial investments and sustainability.’
Dividend Tax
Shell has been one of the crown jewels of the Dutch economy for more than a century. With a turnover of 180 billion dollars in 2020, it is many times larger than the other listed companies in Amsterdam.
The company’s roots go back to 1890, when the colony of the Dutch East Indies successfully drilled for oil by the Royal Netherlands Society for the Exploitation of Petroleum Resources in the Dutch East Indies. After the close cooperation in 1907 with the British ShellTransport and Trading Company Ltd – a company that originally transported sea shells – the name Royal Dutch Shell came into being. However, it never came to a complete merger. The Dutch and British branches have always more or less coexisted, with share listings in both Amsterdam and London.
However, this double listing makes trading in Shell shares unnecessarily complicated, according to investors for years. In addition, the United Kingdom does not collect taxes on dividends, while the Netherlands does. A plan by the Dutch government to abolish that 15 percent dividend tax fell through after major political upheaval in 2018.
– Photo: BELGAIMAGE
CEO Van Beurden returned to that saga a year ago during an interview in The Financial Times. In it he stated in no uncertain terms that it was uncertain whether Shell would remain in the Netherlands in the long term. ‘We once opted for The Hague on the assumption that the dividend tax would be abolished. Now that that is not happening, we are looking at our current Anglo-Dutch structure with different eyes.’
The decision to move has now actually been made – although the shareholders still have to give their final blessing next month. According to Van Beurden, the fact that a Dutch judge still ordered Shell to reduce its emissions more quickly in May did not play a role in the decision.
Victory for Brexit
Due to the crossing to the other side of the Channel, there will soon be only one share of Shell. In this way, the oil group wants to be able to attract capital and make acquisitions ‘faster and more flexible’. It also changes its name. Because the company opts for British nationality, ‘Royal Dutch’ disappears from the official name. ‘A huge loss for the Netherlands’, is what the Dutch entrepreneurs’ association VNO-NCW calls it. “The business climate in the Netherlands is less favorable than expected,” economist Corné van Zeijl told the broadcaster. WNL.
What makes it even more painful is that Shell is not the first crown jewel to turn its back on the Netherlands and opt for the British. Last year, the Dutch-British food giant Unilever – with brands such as Dove, Planta, Ola, Calvé (from peanut butter), Knorr, Ben & Jerry’s, Vaseline – in its portfolio – announced that it would legally become fully British. And in 2018, the Relx Group, a publishing house created from the merger of the Dutch Elsevier and the British Reed, opted entirely for British nationality.
While this is mourned in the Netherlands, the British government welcomes the arrival of Shell as a victory for Brexit. “This is a vote of confidence in the British economy,” Kwasi Kwarteng, the British business secretary, said Monday. “The hundreds of millions they pay annually in taxes will flow into our treasury from now on.”
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