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Wed 11 Sep 2019 08:42 AM

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Saudi Aramco picks Goldman, JPMorgan for top roles in IPO

Saudi Aramco is considering first selling a 1% stake through a listing on the Saudi stock exchange, with the possibility of selling another 1% on the local bourse at a later date

Saudi Aramco picks Goldman, JPMorgan for top roles in IPO
Aramco is targeting an offering in the domestic market as soon as late 2019 or early 2020

Saudi Aramco has picked banks including Goldman Sachs Group and JPMorgan Chase & Co. for top roles on its planned initial public offering following intense lobbying by some of the world’s top dealmakers, people with knowledge of the matter said.

Aramco told banks of their selection Tuesday, the people said, asking not to be identified because the information is private. It plans to add more joint global coordinators to the deal, according to the people.

The energy giant is considering first selling around a 1% stake through a listing on the Saudi stock exchange, with the possibility of selling another 1% on the local bourse at a later date, one person said. Aramco, officially known as Saudi Arabian Oil Co., declined to comment. Representatives for Goldman Sachs and JPMorgan also declined to comment.

CEO Amin Nasser said earlier Tuesday that Aramco is going to sell shares “very soon.” The primary exchange for the listing will be the local bourse, Nasser told reporters at an industry conference in Abu Dhabi.

Aramco is targeting an offering in the domestic market as soon as late 2019 or early 2020 ahead of an eventual international listing.

While it has yet to make a decision on the overseas venue, top officials from exchanges in London, New York and Hong Kong have been actively pitching the oil producer.

Relationship building

Bankers spent the beginning of the month making presentations in Aramco’s headquarters in Dhahran, with some additional meetings in Dubai and London, Bloomberg News has reported. The company invited more than 20 advisory firms from the US, Europe and Asia to compete, including some of the world’s biggest underwriters as well as a number of smaller banks.

It was the final push in what was, for some, years of relationship building with Aramco in the kingdom’s otherwise sleepy Eastern Province. The oil producer was originally working with Evercore Inc. and Moelis & Co., as well as HSBC Holdings Plc, JPMorgan and Morgan Stanley, during its first attempt at an IPO.

The on-again-off-again plans for an Aramco listing had been put on hold as the firm focused on a $69 billion deal for a majority stake in petrochemical maker Saudi Basic Industries Corp. When the preparations were revived this year, many of the banks that won roles initially had to start over, leading some to wonder whether it was worth the effort.

The IPO project was first announced in 2016 as the cornerstone of the kingdom’s Vision 2030 plan to modernize its economy, with a target of listing in the second half of 2018.

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