The big float

THE centrepiece of Saudi Arabia’s plans to transform its economy is the blockbuster sale of a stake in Saudi Aramco, reckoned to be the world’s most valuable company. The government hopes it will put a value on Aramco of about $2 trillion. The proceeds will be central to the country’s plans to create a war-chest to buy non-oil assets from around the world and complement volatile oil revenues with, it hopes, steadier investment income.

But in an interview with The Economist on April 26th, Aramco’s chairman, Khalid al-Falih, noted that potential complications in the sale of the shares mean its final form is not yet decided. An initial public offering (IPO) would offer to investors reliable dividends, from a country that produces one in every eight of the world’s barrels of oil, and the chance to take a share in a company transforming itself into a “global conglomerate”. But the size of the potential stake is unprecedented—$100 billion, or four times the size of the biggest IPO anywhere in the world to date, that of the Chinese e-commerce firm Alibaba in 2014. Only the largest stockmarkets, like New York and London, could handle the sale (some shares would also be offered in Saudi Arabia). That throws up potential legal problems that could have “unintended consequences”, Mr Falih says.