Saudi Arabia kicks off Aramco IPO, eyes $2-trillion valuation

Saudi Arabia finally kicked off what could be the world’s biggest initial public offering, revealing potential tax cuts and dividends to lure investors.

More than three years after Crown Prince Mohammed bin Salman first raised the idea — and just three weeks after a plan to launch the share sale was abruptly delayed — oil giant Saudi Aramco announced its intention on Sunday to list shares on the local stock exchange in Riyadh. The shares are likely to start trading in December.

Aramco’s valuation will be determined during the investor roadshow and bookbuilding for the initial public offering, Chairman Yasir Al-rumayyan said at a news conference at Aramco’s headquarters in the eastern city of Dhahran.

“I think this is the right time for us,” he said, adding that the percentage of international investors compared with local ones is still to be determined. “If we consider an international listing, it will be in the future.” Aramco will release a prospectus for the IPO on November 9, Chief Executive Officer Amin Nasser said at the conference.

Aramco, which pumps about 10 per cent of the world’s oil, generated the most profit of any corporation last year with net income of $111 billion — more than Apple, Google’s parent Alphabet and Exxon Mobil combined. It was targeting a $2 trillion valuation — more than double that of Apple — but the kingdom is now ready to accept a valuation of $1.6 trillion to $1.8 trillion to ensure the IPO is a success, according to people briefed on the matter.

The sale is key to Prince Mohammed’s Vision 2030 plan to overhaul the Saudi economy and end the kingdom’s reliance on oil exports.