Saudi Arabia: Chemical acquisition plans further delay world’s largest IPO

Saudi Aramco signaled another potential delay for the world’s largest initial public offering after it started talks this week to buy a stake in a local petrochemical company.

The state-owned oil company said it may buy a strategic stake in Saudi Basic Industries (Sabic) from the country’s sovereign wealth fund. Sabic carries a market value of little more than US$100 billion and the sovereign wealth fund controls a 70% stake.

The plan to sell shares in the state oil giant Aramco next year is itself a delay from an original plan for 2018. For almost two years, Saudi officials said repeatedly the IPO was “on track, on time” for the second half of 2018. Earlier this year, they admitted it would be delayed into 2019. In May, Saudi Energy Minister Khalid Al-Falih said that the sale would “most likely” happen next year.

Saudi officials said they hope to raise a record US$100 billion by selling a 5% stake, valuing the company at more than US$2 trillion. However, some analysts, including Sanford C. Bernstein & Co and Rystad Energy AS, have suggested a figure closer to US$1 trillion.

Full Content: Financial Times

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