Saudi Arabia believes that its giant state oil monopoly is worth as much as $1.7 trillion. That would make it the most valuable company in the world.
In a statement Sunday, Saudi Aramco said it was aiming to sell about 1.5% of its 200 billion shares in a partial privatization for between 30 riyals ($8) and 32 riyals ($8.53) each.
That means Aramco, the most profitable company in the world, could be worth between 6 trillion riyals ($1.6 trillion) and 6.4 trillion riyals ($1.7 trillion) — making it also by far the world’s most valuable company ahead of Apple (AAPL).
This will not be the only record to fall if Aramco achieves the higher price. At that level, the share sale would raise just over $25 billion, making it slightly bigger than Alibaba’s (BABA) 2014 debut on the New York Stock Exchange, so far the world’s biggest IPO.
Saudi Arabia is selling shares in Aramco for the first time as part of an economic diversification plan that is focusing on weaning the kingdom off oil.
Aramco has huge oil reserves and massive daily output. It holds a monopoly in Saudi Arabia, the world’s largest exporter of crude. It made $111 billion in profit in 2018, and has promised to pay an annual dividend of $75 billion through 2024.
Crown Prince Mohammed bin Salman had reportedly sought a valuation for Aramco near $2 trillion. But low oil prices, the climate crisis and geopolitical risk have raised skepticism among international investors.
The price for the shares will be set on December 5, with trading on the Saudi stock exchange expected to start later that month, according to the prospectus by Aramco.
Wall Street’s biggest names are advising Saudi Arabia on the privatization, even though there is pressure from activists who say financing fossil fuel companies will become worse in the climate crisis.
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