The world’s most valuable oil company may launch the biggest stock offering in history

REUTERS/Ahmed Jadallah

Saudi Arabia is considering offering $50 billion in Aramco shares, the Wall Street Journal reported.
An offering that size would make it the biggest ever in the history of capital markets.
It would top Ant Group’s initial public offering as well as Aramco’s own IPO.

Saudi Arabia is considering an offering of additional Saudi Aramco shares that could shatter records, the Wall Street Journal reported

A potential deal would list Aramco stock worth $50 billion, which would make it the biggest offering in capital markets history.

That would exceed Ant Group’s initial public offering in 2020, when it raised more than $34 billion, as well as Aramco’s own $29.4 billion IPO in 2019.

With shares trading on the domestic exchange in Riyadh, Aramco’s market cap is about $1.7 trillion, making it the world’s most valuable oil company

After months of deliberation, Saudi Arabia plans to list any new Aramco shares in Riyadh to avoid legal complications with international listings, sources told the Journal.

Though no decisions are final, the report said an offering could come before the year’s end. Meanwhile,  Aramco has already begun contacting possible investors, including other global oil companies and sovereign-wealth funds, according to the Journal.

The likelihood of a blockbuster offering is by no means certain as previous attempts to list Aramco shares hit obstacles. 

The oil giant considered selling shares last year but ultimately decided not to because of poor market conditions.

And Aramco’s IPO was sharply curtailed from initial hopes for a listing on a top global exchange that would have brought in $100 billion.

Still, selling stock in the state-owned firm remains a top priority for Saudi Arabia, with de facto leader Crown Prince Mohammed bin Salman intending to use the proceeds to help the country diversify away from oil.

In 2021, he revealed talks to sell 1% of Aramco to an unnamed global energy firm, though no further details followed.

Saudi Arabia is highly dependent on the oil giant, with Aramco’s returns a key source of funds for the government.

Last month, when the firm reported a 38% decline in quarterly profit amid energy price slumps and production cuts, it boosted its dividend up by more than half. 

Read the original article on Business Insider

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