European Giants Are Trying a Radical Path to Stock Market Glory

The latest moves by European companies to list in the US are more radical than meets the eye. AstraZeneca Plc and TotalEnergies SE want to upgrade their existing US equity offering to stock from from quasi stock — a well-trodden path. But as ever, the devil is in the detail.

In each case, the idea is to convert the firm’s American depositary receipts to ordinary shares. ADRs are a tradable legal wrapper for non-US stock; the underlying share is warehoused by a financial institution such as Bank of New York Mellon Corp. The beauty of ADRs is that they simplify dealing in overseas companies for US investors, and give those corporations easy access to US demand. Switching to ordinary shares means grappling with the difficulties that ADRs circumvent.