Aramco sale set to raise at least $11.2 billion for Saudi Arabia

It’s a turnaround from the firm’s initial public offering in 2019, when global funds had largely stayed away and left the government reliant on local investors. That had put the spotlight on foreign participation in the current sale, even as the outlook darkens amid strong supply and demand concerns in China.

A top selling point this time around is ’s $124 billion annual , the world’s biggest. The company’s stock, however, is expensive compared with major Western oil companies.

Bloomberg

Aramco’s shares closed at 28.30 riyals on Thursday, down 2.4% for the week. They fell to the lowest in over a year in the days leading up to the offer, which is set to be the biggest since ’s 2021 listing.

Secondary offerings are relatively rare in the region. Prior deals in the kingdom include . and Tadawul Group Holding, which operates Riyadh’s . Both sales priced at a roughly 10% discount.

The Saudi government is selling stock in the state oil behemoth to raise funds for ambitious plans by Crown Prince Mohammed bin Salman to revamp the country’s economy. The massive spending plans mean the government needs oil at near $100 a barrel, according to the International Monetary Fund.

, which haven’t been near those levels since late 2022, slid in recent days to below $80. The Organization of Petroleum Exporting Countries and its allies earlier this month agreed to extend some of their supply cuts into 2025, but also laid out a framework to gradually return some of the voluntary cutbacks starting in October.

The Saudi government owns about 82% of Aramco, while the holds a further 16% stake. The kingdom will continue to be the main shareholder after the offering.

is lead manager of the share sale, according to a previous statement. It is also serving as a joint global coordinator along with Citigroup Inc., Goldman Sachs Group Inc., HSBC Holdings Plc, JPMorgan Chase & Co., Bank of America Corp. and Morgan Stanley. M. Klein & Co. and Moelis & Co. are independent financial advisers on the offering, according to the statement.