Stock Exchanges Compete to List the World’s Largest Company
The world’s largest oil producer, Saudi Arabian Oil Co., plans to go public next year. The initial public offering (IPO) is expected to raise $100 billion, the world’s biggest IPO to date. Many global stock exchanges want to list the company on their trading floor.
The state-owned oil company also known as Saudi Aramco plans to sell up to 5 percent of its equity. Saudi officials value the company at $2 trillion, which is nearly three times the value of Apple Inc., the world’s most valuable listed company.
However, according to consulting firm Wood Mackenzie, Aramco’s core business is worth only around $400 billion.
With the proceeds of the IPO, Saudi Arabia plans to invest in non-oil assets in order to diversify the economy away from oil.
The company will be listed on the Saudi stock exchange and at least one international market. There is stiff competition among global stock exchanges for the listing. The potential venues include New York, London, Hong Kong, Tokyo, Singapore, and Toronto.
Saudi officials favor the New York Stock Exchange for the planned IPO, according to a report by The Wall Street Journal.
In a recent interview with CNBC, the CEO of Hong Kong Stock Exchange, Charles Li, said listing the company in Hong Kong would entice Chinese investors.
“That is indeed a match made in heaven,” he said about a potential listing in Hong Kong.
Saudi Arabia was China’s biggest oil supplier as of January this year, according to a report by Citigroup.
Moelis & Co., a boutique investment bank, advises Aramco, and investment banks JPMorgan Chase and Morgan Stanley are the lead underwriters for the planned IPO.