FINANCIAL TIMES: ANALYSTS RAISE QUESTIONS OVER POSSIBLE TAX COSTS To hear senior executives at Royal Dutch/Shell tell it, the plan to combine their Dutch and British holding companies has been met with universal approval, writes James Boxell. "Given the cost, complexity, index-buying pressure, uncertainty and continued dual-share structure raised by the proposal to create a new holding company, which we do not see adding value per se, Royal Dutch and Shell Transport shareholders should consider very carefully whether this transaction is actually what they want…" (ShellNews.net) Posted 27 Jan 05

By James Boxell

ANALYSTS RAISE QUESTIONS OVER POSSIBLE TAX COSTS To hear senior executives at Royal Dutch/Shell tell it, the plan to combine their Dutch and British holding companies has been met with universal approval,writes James Boxell.

But analysts at CSFB have raised questions about possible tax costs from the merger. "Given the cost, complexity, index-buying pressure, uncertainty and continued dual-share structure raised by the proposal to create a new holding company, which we do not see adding value per se, Royal Dutch and Shell Transport shareholders should consider very carefully whether this transaction is actually what they want," they said.

To make sure there were no increased tax penalties from the merger, Shell said it would maintain separate A and B shares for British and Dutch shareholders. The company has sold the deal on the basis that it will be "tax neutral" at corporate level and for shareholders. However, CSFB - which questioned the rationale of the merger - urged "UK investors to get their own detailed tax advice on the implications". It also raised the prospect of a possible $1.8bn (£970m) stamp duty liability, although Shell repeated yesterday that the transaction would be tax neutral.