Saudi Aramco share sale raises $12.35 billion, exceeds expectations

The sale of shares in Saudi Arabian oil giant Aramco reached $12.35 billion at the end of the stabilization period, surpassing the initial forecast by $1 billion, according to a statement released on Wednesday.

The Saudi state-owned crown jewel launched a secondary public offering on May 30, offering 1.545 billion shares, which represent approximately 0.64% of its issued shares.

Acting as the stabilization agent, Merrill Lynch Kingdom of Saudi Arabia announced on Wednesday that the stabilization period had ended and that the overallotment option had been exercised.

This option allows for the purchase of more shares than initially planned to meet strong investor demand. The overallotment was exercised on 154,500,000 shares, increasing the total offering volume to 1,699,500,000 shares at a price of 27.25 Saudi riyals per share, the statement said.

As a result, Aramco's public offering will yield $12.35 billion for the Gulf kingdom, compared to the initial estimate of $11.2 billion.

Sources close to the matter disclosed to AFP in late May that approximately 58% of the shares were allocated to international investors, compared to around 23% during the 2019 initial public offering of 1.5% of Aramco, which raised $25.6 billion in the largest IPO in history.

This second offering is expected to bolster the short-term finances of the oil-rich monarchy, which is engaged in an ambitious reform program aimed at preparing for a post-oil future.

The successful share sale highlights the strong demand for Aramco's stock and reflects the ongoing confidence in the company and the broader Saudi economy.

The proceeds from this offering will provide a significant boost to the kingdom's economic diversification efforts and its Vision 2030 initiative, which seeks to reduce the nation's dependence on oil revenue.