Investors in London and The Hague voted to back unification of the Royal Dutch Petroleum Company and Shell Transport and Trading, triggering an overhaul of the group’s corporate governance structures.

Shell hopes the unification of its Dutch and British parent companies, planned for July 20, will help streamline its management structure, whose complexity was blamed for a damaging oil reserves overbooking scandal last year.

Royal Dutch/Shell, the third-biggest oil company in the world by market capitalisation, announced plans last October to move to a more traditional single-board structure with one chairman and one chief executive, scrapping its current dual-board arrangements based in Britain and the Netherlands.

Investors saluted news of the merger, with shares in Shell rallying 2.23 per cent to 539.75p in London trading, as dealers took positions in expectation of approval leading to portfolios having to be rebalanced by passive funds.

Shell is at present 60 per cent owned by the Royal Dutch Petroleum and 40 per cent by the Shell Transport and Trading Co.

Executives of the operating group are drawn from the boards of each holding company.

The unified firm, to be named Royal Dutch Shell Plc, will have clearer reporting lines and has pledged to be more responsive to shareholders.

The merged company will have its headquarters in The Hague but have its primary listing in London. When it starts to trade, it will have a market capitalisation of around £110 billion.

Following the unification, Shell’s weighting in the FTSE 100 share index is expected to more than double, creating a wave of buying from index-tracking funds.

Goldman Sachs said it expected £3.6 billion of extra buying interest, which would offer significant support for the shares.

The existence of a single Shell share could also help the group play a bigger role in oil industry consolidation. Peter Voser, the company's chief finance officer, told a German newspaper earlier this month that the restructuring would allow Shell to use its shares as a currency for acquisitions.

Royal Dutch/Shell has struggled to win back investors’ trust after admitting between January 2004 and February this year that it had overstated its proved reserves of oil and gas by almost 6.0 billion barrels, and that senior executives were aware of problems long before they were made public.

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