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5 things to know about the Saudi Aramco IPO

The world's most senior investment bankers have been lining up to play a role in the offering.

In January, the world’s biggest oil company indicated that it is planning an initial public offering (IPO), marking the first time that Aramco stock has been available to the public. The Saudi state-owned titan will put less than five percent of its value on the table — but with the IPO expected to value the company at more than US $2 trillion, this is hardly a meagre offering.

It is thought that the listing could happen as early as next year. Here’s what we know so far:

Like everything Aramco does, it’s going to be the biggest
The monetary value of the stock on offer is estimated to be about $100 billion. This means Aramco’s initial public offering will be the biggest ever seen by a massive margin. In 2014, Chinese eCommerce giant Alibaba made a record $25 billion from its own IPO.

The world’s most senior bankers all wanted a slice
By all accounts, some of the world’s most influential investment bankers have been descending upon Aramco’s Dhahran headquarters hoping to win their own piece of the action. Christopher Wheeler, a London-based analyst with Atlantic Equities LLP, told Bloomberg in June: “Saudi Arabia is close to the top, if not at the top, of the agenda for banks. What else is there at the moment?”

...But the likely winners have probably been decided
Insiders have said that HSBC, JPMorgan and Citigroup are the ones that will arrange the offering. However, no one at the three firms offered comment on the speculation. Earlier in the year, the Wall Street Journal claimed that JPMorgan’s eight-decade long relationship with Saudi Arabia would cement its role in the IPO.

Though this isn’t deterring Japan
The chairman of Japan’s Sumitomo Mitsui Financial Group has said that his bank wants to “assist” Aramco with the IPO. While Aramco has yet to select a stock exchange to host the offering — and Japan seems something of an underdog — that won’t stop trade ministers from suggesting to deputy crown prince Mohammed bin Salman that Aramco list the shares on the Tokyo Stock Exchange.

Saudi Arabia is looking to boost oil prices ahead of the sale
One industry source told Reuters that the Saudi government "want higher oil prices for a better Aramco valuation". Energy Minister Khalid al-Falih has said that the world needs oil above $50 per barrel in order to balance the market.

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