Shell to Acquire Minority Shares in Shell Canada

Royal Dutch Shell has approached the Board of Directors of Shell Canada Limited to indicate its intention to offer to acquire the minority interests in Shell Canada Limited (Toronto Stock Exchange, ticker symbol SHC), for a cash price of C$40/share. This proposal would value Shell Canada Limited's fully diluted minority share capital at approximately C$7.7 billion. The Group owns a 78% stake in Shell Canada Limited.

The proposed acquisition follows the successful unification of the Group in 2005 and is a further step in simplifying the Group structure. Once Shell Canada Limited is fully combined with the Group, the business will benefit from a simplified organization, additional economies of scale and portfolio development in the context of the Group's global strategy.

Shell Canada Limited has built a substantial position in Canada's oil sands and is embarking on a major expansion of production and upgrading capacity. Canada is an important growth area for the Group, and the Group will be a major investor in Canada for many years to come. Bringing Shell Canada Limited fully into the Group will allow a unified technology plan between Shell Canada Limited and the Group and full access to the Group's financing capabilities. It is an opportunity to create an integrated unconventional oil business on an international scale.

Chief Executive Jeroen van der Veer commented "we think the interests of the Shell Canada Limited minority shareholders are well served by accepting the cash offer we are proposing." Van der Veer concluded "our proposal should create the opportunity for the Group to build further on a strong position in Canada, using the strengths that only a company of our global scale can bring".

The Group has requested that the Shell Canada Limited Board establish a special committee of independent directors to supervise the preparation of a formal independent valuation and to review and make a recommendation with respect to the proposed offer. It is the Group's desire to proceed with a transaction supported by Shell Canada Limited's Board. The Group reserves the right, however, not to proceed with the making of an offer if it is unable to obtain this support. The mailing of the Group's offer will be dependent on the timing of the completion of the independent valuation, a summary of which will be included in the offer circular.

Royal Dutch Shell plc's formal offer, when made, will be conditional on more than 50 (fifty) percent of the outstanding shares (calculated on a fully diluted basis) held by the minority shareholders of Shell Canada Limited being tendered as well as other customary conditions, including the absence of any material adverse change, the obtaining of any relevant regulatory approvals and the absence of any adverse litigation, proceeding or legal prohibition in respect of the offer.

There would also be a further condition that Royal Dutch Shell plc shall have determined, or shall have been satisfied by Shell Canada Limited, that no covenant or condition exists in any agreement or instrument of Shell Canada Limited that would make it inadvisable for Royal Dutch Shell plc to proceed.


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