SAUDI Aramco has announced its intention to proceed with its long-awaited public stock listing, which is expected to be the world’s largest.
The initial public offering (IPO), which is when a private company offers shares on the public market for the first time, was originally announced in 2016. It was expected to launch in the same year but has been delayed numerous times. The move is part of Crown Prince Mohammed bin Salman’s plan to end the country’s reliance on oil and diversify the Saudi economy by investing in other industries.
Saudi Aramco plans to list shares on the domestic Saudi Arabia market, and an international share sale might happen at a later date. Prince Mohammed has valued the company at US$2trn, but the actual valuation is likely to be lower as investors are unlikely to buy at that level, according to The Wall Street Journal. Sources vary on the valuation price, which could be between US$1.2trn and US$1.6trn, according to Bloomberg.
Sources also vary on the percentage of shares that will be offered, with the BBC estimating 1–2%, and The Wall Street Journal estimating 2–5%. According to The Guardian, precise details are expected on 9 November, with trading expected to begin on 12 December.
Even with a lower valuation, the IPO will be the world’s largest sale of shares. The largest so far was Chinese technology firm Alibaba, which raised US$25bn. If Saudi Aramco is valued at US$1.5trn, a 3% listing would raise US$45bn.
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