Saudi Arabia is set to sell a portion of Aramco, which is expected to raise up to $12 billion. This offer is one of the largest share sales globally since the oil giant was listed five years ago. If priced at the top end of the range, it will be the sixth-largest share sale since Aramco’s $30 billion IPO in 2019 and the fourth-largest follow-on offering during that time.
The kingdom has the potential to raise an additional $1.2 billion by selling more shares as part of the offering. The proceeds from this sale will be used to support initiatives aimed at diversifying the economy away from oil. Crown Prince Mohammed bin Salman is leading efforts in this area, investing in areas such as artificial intelligence, sports, tourism, and projects like Neom.
This move is crucial as crude oil prices are currently below the levels needed for the government to balance its budget. Additionally, Saudi Arabia has fallen short of its goal to attract over $100 billion in foreign direct investment each year. The decision to hold this share sale was made years ago when Crown Prince Mohammed bin Salman stated that more Aramco shares would be sold in the future. Plans for this follow-on offering gained momentum a year ago when advisers began working with Saudi Arabia on assessing its feasibility in Riyadh.
