Channel4 News: Shell investors vote for merger: Tuesday 28 June 2005

Last Modified: 28 Jun 2005

Source: ITN

Shareholders in the Shell oil firm have voted 99.75 per cent in favour of a plan to create a new holding company, Royal Dutch Shell.

Shell is currently 60 per cent owned by Royal Dutch Petroleum and 40 per cent by the Shell Transport and Trading. But the vote, plus that of shareholders in the Netherlands, means RDP and STT are to merge so that Shell has one parent.

Trading in Royal Dutch Shell shares is due to start on 20 July. With a market capitalisation of more than £100bn it could be be the world's third-largest publicly traded oil firm. It will be headquartered in The Hague but have its primary stock market listing in London.

The change should also help streamline its management structure. The company is still reeling from the resignation of several top executives, including its chairman, after a scandal over reserves last year.

And Shell's share price lifted during the day as fund managers flock to buy. The new company will account for 9 per cent of the FTSE, as opposed to present-day Shell's 3.9 per cent and in order to follow the index, managers must buy more to increase their weighting in the stock.

The quote rose 17p to 545p as the blue-chip heavyweight also benefited from crude prices staying close to the $60 mark because of supply fears and the surprise election of a hard-liner as president of Iran.

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