$25.6 billion Saudi Aramco flotation smashes share sale world record

Saudi Aramco has priced its initial public offering at SR32 ($8.53) per share. (Aramco)
Updated 07 December 2019

$25.6 billion Saudi Aramco flotation smashes share sale world record

  • Initial offering values oil giant at $1.7 trillion — the same as Google and Amazon combined
  • The IPO will raise $25.6 billion beating Alibaba's record $25 billion listing in 2014

DUBAI: The biggest share listing in history — the initial public offering (IPO) of shares in Saudi Aramco — will take place on the Tadawul stock exchange in the next 10 days after the world’s most profitable company announced the results of its offer for sale.

Aramco shares will be priced at the top of the range on offer — SR32 per share — after strong demand from Saudi and regional investors, who bid for nearly five times the number of shares on offer.

That values Aramco at $1.7 trillion, bigger than any other quoted company in the world, or roughly equivalent to the stock market value of Google and Amazon combined.

At that price, the IPO is the largest ever, though only 1.5 percent of Aramco is being sold. That portion is valued at $25.6 billion, more than the previous IPO record holder, the Chinese e-commerce group Alibaba, in 2014.

The IPO may even be increased to meet unsatisfied investor demand. Aramco has the option to issue a further 450 million shares under the terms of a “purchase option” agreed with the investment banks advising on the deal. The final size could be as much as $29.4 billion.

Two-thirds of the IPO has been taken up by institutions, and the rest by private investors in Saudi Arabia and other GCC states. It was 465 percent oversubscribed.

Aramco marketed the IPO only in the Arabian Gulf following a decision not to make “road show” trips to big Western financial centers. Advisers were confident there was sufficient demand in the Middle East, but the Saudi government has the option to sell further shares in the future to foreign investors or on a foreign stock exchange.

One Middle East financier for an Asian institution said: “So far so good for the Saudis. There may be some foreign and sovereign investors named in the next few days, which will be interesting.”

Trading in the shares will take place after legal and procedural requirements are completed on Dec. 12.


Aramco chief sees demand for oil staying above 100m barrels

Updated 23 January 2020

Aramco chief sees demand for oil staying above 100m barrels

  • A panel on the global energy outlook at the WEF in Davos heard that renewable energy alone would not be able to meet rising demand for power as more people moved into the middle class
  • The panel also heard that coal, not oil, remained the biggest source of carbon emissions

DAVOS: Aramco CEO Amin Nasser said he expected global oil demand to stay above the 100 million barrels threshold as the rise of the global middle class spurred demand for energy.
A panel on the global energy outlook at the World Economic Forum in Davos heard that renewable energy alone would not be able to meet rising demand for power as more people moved into the middle class.
“There will be additional demand and the only way to meet it is if you continue to provide affordable, reliable and viable energy to the rest of the world,” said the Aramco CEO.
“There is good penetration from renewables and electric cars are picking up however you need to consider what is happening in the world. There are still an additional 2 billion people coming. There are currently 3 billion people using biomass, animal dung, kerosene for cooking and there are 1 billion people today without electricity and almost 50 percent of people have never flown in an aeroplane.”
The panel heard that coal, not oil, remained the biggest source of carbon emissions but that the location of many coal-fired power plants in developing Asian economies meant that reducing its impact was a major challenge.
“The number one source of emissions by far is the coal fire power plants – they alone are responsible for one third of emissions,” said International Energy Agency Executive Director Fatih Birol. “But they are in many cases the number one source of electricity generation in low income countries - so this is not a black and white issue.”