US Banks Oversee Stellar Share Offering From Saudi Aramco

Saudi Aramco, also known as the Saudi Arabian Oil Group or simply Aramco, is a state-owned petroleum and natural gas enterprise serving as the national oil company of Saudi Arabia. As per 2022 statistics, the company was the second-largest globally by revenue. Aramco boasts a market cap of SAR 7.01 trillion (equivalent to around $1.836 Trillion).

Announced on June 2, 2024, the Kingdom of Saudi Arabia announced that it would be selling shares of Aramco on the Saudi Exchange. The deal commenced on June 2 and is estimated to generate as much as $13.1 billion in assets for the country.

The Offering consists of a secondary public sale of 1.545 billion shares of the Company (Offer Shares), which account for 0.64% of the Company's total issued shares. According to the disclosure, the offering is available to institutional investors nationally and from other GCC countries.

From the U.S., leading global investment banks including Citigroup Inc (C:US), Goldman Sachs (GS:US), HSBC Holdings PLC (HSBC:US), JPMorgan Chase & Co (JPM:US), Bank of America Corp (BAC:US), and Morgan Stanley (MS:US), alongside several local firms, are overseeing the sale.

The Saudi government owns more than 82% of Aramco directly, while the Public Investment Fund (PIF) holds 16% (12% directly and 4% through a subsidiary), with the rest owned by public investors. 

From a different perspective, this offering by Aramco comes at a time when questions are being raised for the future. Global economies want to transition towards more renewable energy sources and lower carbon emissions. In the current climate, Saudi Arabia aims to raise funds for its upcoming national projects, some estimated to come with a price in billions.