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Oilfield services giant Weatherford International Ltd.’s (WFT - Analyst Report) share price fell almost 1% on the announcement that its board of directors has approved the relocation its legal domicile to Ireland from Switzerland.

The incorporation under the Irish law will strengthen Weatherford’s activities and facilitate operations at the lowest possible cost. It will also boost the company’s ability to rapidly and efficiently carry out and progress on its transformational path. The move will enable the company to retain and further attract the finest personnel in the industry.

The company’s strategy emphasizes on expansion of its core businesses and selling off its non-core assets. Weatherford’s future success rests on successful execution of its planned divestitures.

The New-York listed drilling company, which has maintained its main operational office in Houston after it moved to Switzerland five years ago, will put forward the proposal for shareholders approval at an extraordinary general meeting in June. If the shareholders give consent to the proposal, the Swiss Weatherford parent company would merge into a new subsidiary called Weatherford Ireland. The new company would assume the role of a publicly traded parent of Weatherford’s companies and retain its tax residency in Switzerland. It would continue to report to U.S. securities regulators.

Along with the merger, Weatherford also plans to delist its shares from the SIX Swiss Exchange and NYSE Euronext Paris.

An order passed by the Swiss Federal Council in Nov 2013, allows the company’s shareholders to give binding votes on executive and board member compensation, beginning next year.

It forbids severance payments to retiring top brass. For years, the Swiss law has given investors an advantage in corporate affairs. For example, one rule allows investors to expel directors without giving a cause if they gather two-thirds of shareholder voting rights.

Per the company, these new rules could lead to confusing and conflicting proposals to its shareholders and contradict the disclosures on pay in U.S Securities and Exchange Commission. Therefore, Weatherford has decided to conduct its annual general meeting in Sep 2014 as an Irish company, subject to shareholders consent of proposal in Jun 2014.

Weatherford carries a Zacks Rank #3 (Hold). Other stocks in the oil and gas industry looking good with the Zacks Rank #1 (Strong Buy) include Valero Energy Corporation (VLO - Analyst Report), Unit Corporation (UNT - Snapshot Report) and Helmerich & Payne, Inc. (HP - Analyst Report).
 

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