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A public listing that would have made Saudi Arabian oil giant Aramco into the world’s most valuable company — more than twice as big as Apple, at $2.5 trillion — is reportedly off the table, four senior industry sources told Reuters.
“The message we have been given is that the IPO has been called off for the foreseeable future,” a senior financial adviser told Reuters on Wednesday.
The massive initial public offering was the linchpin of Vision 2030, Crown Prince Mohammed bin Salman’s sweeping plan to reform the Saudi economy as the kingdom withdrew its dependence on oil. Notoriously secretive, state-owned Saudi Aramco is the world’s largest oil company, producing around 10 percent of the world’s crude — or around 10 million barrels a day.
A slump in oil prices, combined with war in Yemen and a young population, has wreaked havoc on the kingdom’s budget. Bin Salman’s plan included multimillion-dollar investments in technology companies such as Uber and Tesla, new initiatives for tourism, a focus on manufacturing, reducing the number of foreign workers, and adding more women in the work force.
But the Aramco IPO had long been marred by in-house squabbling, from which exchange would be chosen for the flotation, to what the company’s initial valuation should have been.
Cancellation of the deal is a substantial blow to the three banks involved: HSBC, J.P. Morgan, and Morgan Stanley, which would have reaped almost a billion dollars in fees from what some referred to as the deal of the century.
“The IPO has not been officially called off, but the likelihood of it not happening at all is greater than it being on,” a senior oil industry official told Reuters.