Royal Dutch/Shell shareholders voted overwhelmingly yesterday to unify the Dutch and UK arms of the energy group. Senior executives said the "momentous" dismantling of the dual-company structure would allow them to take part in the next round of oil industry consolidation.
The company is said to be willing to consider acquisitions worth up to $8 billion-$9 billion (€6.6 billion-€7.45 billion), despite worries that deals are expensive, with crude prices of about $60. Investors blamed the previous structure for last year's reserves scandal, which forced the company to cut proved reserves by a third and led to the removal of three senior executives, $150 million of fines from regulators and several lawsuits.
In preliminary votes, 97.4 per cent of Royal Dutch shareholders were in favour of the merger, while 99.75 per cent of their UK counterparts at Shell Transport & Trading supported the deal.
Jeroen van der Veer, the first chief executive of the combined group, which will be known as Royal Dutch Shell plc when it officially merges on July 20th, said: "It is a win-win situation in that both countries come out of it well." Peter Voser, chief financial officer, said the new structure would "allow effective communication with shareholders".
The existing company, Royal Dutch/Shell, is 60 per cent-owned by Royal Dutch and 40 per cent by Shell Transport.
The relative shareholdings will be maintained in the new group, with Royal Dutch shareholders receiving "A" shares and Shell Transport shareholders getting "B" shares, to maintain UK tax advantages.
Lord Oxburgh, chairman, Shell Transport, ruled the company out of the running for Unocal, the US group that was approached by China National Offshore Oil Corporation (CNOOC) after accepting an $18.5 billion bid from ChevronTexaco.
PetroChina, China's biggest oil producer, has become the first Chinese company to top Asia's corporate rankings by market value, overtaking Japan's Toyota Motor.
Shares in PetroChina rose 3.5 per cent to a record HK$5.85 (€0.62) yesterday. A 25 per cent gain since the beginning of May has taken company's market value to HK$1,030billion
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