Saudi Arabia’s giant oil company likely isn’t worth as much as Crown Prince Mohammed bin Salman has hoped.
Continue Reading Below
Executives who are working on the state-owned Saudi Aramco’s initial public offering have suggested it’s worth $1.5 trillion, The Wall Street Journal reports, citing people familiar with the matter. Salman previously floated a $2 trillion valuation.
Either way, Aramco would surpass Microsoft ($1.07 trillion) and Apple ($1.04 trillion) as the world’s largest publicly traded company.
Officials have been targeting an Aramco listing on the domestic Saudi Stock Exchange by the end of 2019, and an international listing at some point in 2020. Aramco is expected to sell 5 percent of itself in an IPO, with the hopes of raising up to $1 billion.
The kingdom is expected to use the money to fund military upgrades and deliver on Salman's Vision 2030 social agenda. JPMorgan Chase, Citigroup and Goldman Sachs are among the banks that have been chosen to underwrite the offering.
About half of Saudi Aramco's oil production was temporarily knocked offline last month by drone attacks allegedly conducted by Iran. Aramco has said production will be fully restored by November. The kingdom has said it plans to go ahead with the IPO as scheduled.
Aramco recorded $111 billion in net profits in 2018 on revenue of $355.9 billion, according to Moody’s Investor Services.