Nov 1, 2019

Reports: Saudi crown prince approves Aramco IPO

Crown Prince of Saudi Arabia Mohammed bin Salman al Saud. Photo: Alexei Nikolsky / Contributor

Saudi Crown Prince Mohammed bin Salman on Friday gave the green light for the initial public offering of state-owned oil giant Aramco, per reports in Bloomberg and Reuters.

Why it matters: Offering a small slice of the company is designed to raise tens of billions of dollars to fund the kingdom's economic diversification efforts. But the plan to list up to 5% of Aramco has been beset with delays since the crown prince first made the announcement in 2016.

What's next: Reuters reported the announcement is “expected” Sunday, while Bloomberg said “as soon as” Sunday.

  • Officials are reportedly planning to list a portion of that 5% on the Saudi's domestic stock exchange as soon as this year.
  • A later listing on a larger international exchange has also been discussed, but officials have not specified a venue.

But, but, but: The IPO has been an on-again, off-again idea for a while, so signs of it moving forward should be treated with caution until it actually happens.

  • Bin Salman faces widespread doubts about his hoped-for $2 trillion valuation for the mammoth oil producer.
  • "It’s not clear if the prince is willing to accept a lower valuation," Bloomberg notes. Reuters reports: "A valuation closer to $1.5 trillion is more likely, with wealthy Saudi families the main investors in the IPO."

Go deeper: Saudi Aramco revs up IPO sales pitch

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Saudi Arabia approves IPO of oil giant Aramco

Saudi Crown Prince Mohammed bin Salman at a September meeting in Jeddah, Saudi Arabia. Photo: Mandel Ngan/AFP via Getty Images

Saudi Arabia has approved the long-anticipated initial public offering of state-owned oil giant Aramco, the kingdom's market regulator announced in a statement Sunday.

Why it matters: This could be the biggest IPO ever. Aramco is responsible for about 10% of the world’s oil production, per Bloomberg, which notes it "generated the most profit of any corporation last year with net income of $111 billion — more than Apple Inc., Google’s parent Alphabet Inc. and Exxon Mobil Corp. combined."

Go deeperArrowNov 3, 2019

Oil giant Saudi Aramco sets initial IPO valuation at $1.7 trillion

The Saudi Aramco oil refinery in Saudi Arabia. Photo: Tom Stoddart/Hulton Archive/Getty Images

Saudi Arabian state-owned oil giant Saudi Aramco said in an updated prospectus Sunday that it has set an initial valuation of $1.6 trillion to $1.71 trillion.

Why it matters: The IPO could potentially be the world’s biggest, though it does fall short of Saudi Crown Prince Mohammed bin Salman's hopes of a $2 trillion valuation.

Go deeperArrowNov 17, 2019

Saudi Aramco's shrinking IPO

President and CEO of Saudi Aramco Amin Nasser (left), and Aramco's chairman Yasir al-Rumayyan (right).

Saudi Arabia's decision to abandon a $2 trillion valuation for the Aramco IPO underscores hurdles facing Crown Prince Mohammed bin Salman's plans to use the company as a tool for diversifying the kingdom’s crude-reliant economy.

Driving the news: ICYMI, over the weekend Aramco announced preliminary pricing on the offering that signals an estimated valuation of the world's largest oil-producing company in the $1.6–$1.7 trillion range.

Go deeperArrowNov 18, 2019