What Happened: Saudi Arabia is considering doubling the size of the initial public offering for the Saudi Arabian Oil Co. from a 5 percent stake in the state-owned oil company to 10 percent, The Wall Street Journal reported Sept. 24. The company's plan to begin the IPO by selling a 1 percent stake on the Saudi Tadawul exchange before opening it to international investors remains in place.
Why It Matters: With Saudi Aramco's valuation expected to be between $1 trillion and $1.5 trillion — which falls short of Crown Prince Mohammed bin Salman's ambitious $2 trillion target — the 5 percent offering would raise just $50 billion. Thanks to the larger stake, combined with adjustments in the company's fiscal terms, the 10 percent offering could bring in far more than $100 billion.
Background: The IPO is part of Saudi Arabia's long-term plan to retool its economy and decrease its dependence on oil revenue.
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- Attacks Deal a Blow to Saudi Aramco's Prospects (Sept. 16, 2019)
- Will Saudi Aramco Fall Prey to a Prince's Politics? (Jan. 3, 2018)