Saudi Arabia and the UK have signed a memorandum of understanding (MoU) to drive investments between the two countries, just weeks after its acquisition of Newcastle United Football Club.
At the Saudi-UK roundtable session on the sidelines of the Fifth Future Investment Initiative (FII), the agreement aims to promote direct investment by facilitating the establishment and expansion of Saudi companies in the UK as well as growing the number of UK companies in Saudi Arabia.
It also aims to enhance cooperation opportunities in the field of direct investment in the two countries and exchanging rules and regulations related to direct investment opportunities.
The agreement was signed by Saudi Minister of Investment Khalid Al Falih and British Minister for Investment Lord Gerry Grimstone (pictured below).
Earlier this month, Saudi Arabia’s first foray into purchasing external sports assets marked a softening of cautious British attitudes to the kingdom.
Saudi Arabia’s Public Investment Fund (PIF), which purchased an 80 percent stake in Newcastle United for £300 million ($413 million), is thought to have acquired the football club to boost its international profile and support its own sports talent drive as part of the kingdom’s ambitious Vision 2030 reform plan.
Earlier this month, Lumina Capital Advisers predicted strong deal activity across the Saudi-UK corridor, emerging from easing travel post Covid-19 crisis, Brexit and Vision 2030 implementation.
Reaffirmed by recent bilateral ministerial visits between Saudi Arabia and the UK, investment into key UK sectors such as healthcare and education are set for significant growth over the coming years, the company said in a statement.
It said the Newcastle United deal is an early example of ongoing investment into the UK, adding that “rapid growth” is expected in the hospitality, entertainment, and infrastructure services sectors between the UK and Saudi Arabia.
Fikry Younis, a recently appointed Lumina Saudi Arabia partner, said: “The rapid growth we are seeing in Saudi M&A activity, in addition to Vision 2030, as well as Brexit, are resulting in a myriad of bilateral trade opportunities across Lumina key markets.
“As a result, we expect that M&A activity between Saudi Arabia and the UK will continue to witness an upward momentum.”
The UK kicked off the process to sign a trade deal with Saudi Arabia and the rest of the Gulf earlier this month as it seeks to strengthen economic ties beyond the EU.
Negotiations for a pact between Britain and the GCC will start in 2022 following a 14-week consultation with the public and businesses, according to the UK’s Department for International Trade.
UK-Gulf commerce was worth £45 billion in 2019, seven percent of the size of Britain’s trade with the EU in the same year.
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