By OGJ editors
HOUSTON, Oct. 28 -- The boards of Royal Dutch/Shell Group and Shell Transport & Trading Co. (ST&T) have proposed to shareholders that the companies be merged under a single parent company, Royal Dutch Shell PLC.
The move to formally combine the group's British and Dutch parent companies under a single board and a single executive was prompted by criticism from investors who said that the old structure hindered transparency and financial accountability.
That criticism escalated this year after Shell announced in January its first of four adjustments that ultimately lowered proved reserves by 24%, mainly through reclassification.
The new combined company will be based in The Hague. Its primary stock listing will be in London with a secondary list in Amsterdam and American Depositary Receipts trading in New York.
Under the proposal outlined Thursday, Jeroen van der Veer, chairman of Shell's committee of managing directors, is to become the first chief executive. Royal Dutch/Shell Chairman Aad Jacobs will be the nonexecutive chairman of the new company until his previously planned retirement in 2006.
The proposal involves a public exchange offer in which Royal Dutch/Shell shareholders will be offered 60% of the Royal Dutch/Shell ordinary shares and ST&T shareholders will be offered 40% of the ordinary shares of Royal Dutch/Shell.
The transaction is expected to be complete in May 2005, and the first report of combined 6-month financial results is June 30, 2005.
