Abu Dhabi sovereign fund weighs investment of at least $1 billion in Aramco IPO: sources

By Rania El Gamal, Hadeel Al Sayegh and Saeed Azhar

DUBAI/ABU DHABI (Reuters) – Abu Dhabi Investment Authority (ADIA) is weighing an investment of at least $1 billion in the initial public offering (IPO) of Saudi Aramco, which is relying mainly on Saudi Arabian and Gulf investors to raise up to $25.6 billion, five sources familiar with the matter said.

A final decision on the amount has yet to be taken and would need approval from ADIA’s board of directors, one of the sources said.

ADIA, estimated to have assets of nearly $700 billion, is chaired by the president of the United Arab Emirates, Sheikh Khalifa bin Zayed al-Nahyan, while its deputy chairman is Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahyan.

An ADIA spokesman and Aramco declined to comment.

Two of the sources said ADIA was considering an investment of at least $1 billion, while two other sources gave a range of between $1.5 billion to $2 billion.

State oil giant Aramco has struggled to attract a major cornerstone or anchor investor for its IPO, which could be potentially the world’s biggest. It has also approached Kuwait Investment Authority (KIA) and Singapore’s GIC.

It had canceled marketing roadshows for its listing outside the Gulf region on lack of interest from foreign institutional investors, many of whom see Aramco’s valuation as expensive given concern over political, governance and environment issues.

Saudi Arabia aims to sell 1.5% of Aramco in the deal, valuing the company between $1.6 trillion and $1.7 trillion – lower than the $2 trillion target initially sought by Crown Prince Mohammed bin Salman, who has made the offering a pillar of his ambitious economic diversification drive.

(Additional Stanley Carvalho in Abu Dhabi and Davide Barbuscia in Dubai; Editing by Clarence Fernandez)

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