The Biggest Deal of the Century: & How to Make It Work

Abstract

Deputy Crown Prince Muhammad bin Salman’s remarks about an initial public offering (IPO) for a stake in Saudi Aramco is a shot across the bow for many – the world’s major international oil companies (IOCs), other nations and their state-owned national oil companies (NOCs), and all those within the Kingdom of Saudi Arabia whose fate is tied to a successful outcome.With oil prices so low it may seem an odd time to sell share shares in the world’s largest oil company. But this, the biggest deal of the century, is not about market timing. Nor is this principally a financial transaction. This deal will serve as the catalyst for change – cultural change, organizational transformation, and economic evolution and development. The giant has awoken and the only thing that is certain is that the world will never be the same.An Aramco IPO, now tentatively slated for 2018, revives the decades-old debate about the merits of publicly-traded company ownership and the unique case of state-led enterprises. NOCs and other state-led enterprises already face an enormous challenge in balancing the needs of their public mission with the demands of commercial and economic success. The additional burden of publicly-traded ownership raises the stakes with the difficult balance between public good and public shareowners.