Saudi Prince Alwaleed to Offload 16.87% Stake in Kingdom Holding to PIF for $1.5B

Published: May 23, 2022
Updated: May 23, 2022
alwaleed bin talal

Alwaleed to sell 16.87% of Kingdom Holding

Saudi Arabia’s Public Investment Fund has agreed to buy a 15% share in Kingdom Holding Co. from Saudi billionaire Prince Alwaleed bin Talal for SR5.7 billion ($1.5 billion). According to a market filing, a 16.87 percent ownership in Kingdom Holding, or 625 million shares, would be transferred to the PIF.

Alwaleed bin Talal’s ownership will be lowered to 78.13 percent after the transaction is completed. Kingdom Holding, situated in Riyadh, was founded in 1980 and engages in a variety of investment businesses.

The investment firm’s shares jumped 8.8% to top the gainers in early Sunday trading, with a share price of SR9.89 as of 10:53 a.m. Saudi time. The Saudi sovereign wealth fund plans to more than treble this increase by 2025, with a goal of managing SR4 trillion in assets and adding billions of dollars to the Kingdom’s non-oil gross domestic product.

Housing, healthcare, and financial services have all been selected as important industries in the company’s diversification plan. However, tourism received the PIF’s first major announcement in 2021.

The fund makes investments outside of Saudi Arabia in order to add value to the Saudi economy. As the Kingdom approaches 2030, the next four years will be crucial for the PIF.

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It is an important aspect of the Kingdom’s diversification plan, especially in terms of accomplishing the Vision 2030 objectives. PIF has launched 47 firms and produced over 400,000 employees directly and indirectly through its initiatives and ventures since the acceptance of its new strategy in 2016.

By the end of the first quarter of 2022, the fund had decreased its holdings of US equities by 22% to $43.6 billion, down from $55.9 billion a quarter earlier. According to Argaman, PIF reduced its interest in three companies: Visa Inc., Plug Power, and Walmart, citing a filing with the US Securities and Exchange Commission.

Take-Two Interactive, PayPal, Alibaba, and Farfetch Ltd were among the companies in which it raised its stake. While the sovereign fund sold its interest in Just Eat, it made five new investments in Carnival, Babylon, SIGNA Sports United NV, Meta Platforms, and Sea Ltd.

PIF recently announced the formation of Saudi Coffee Co., which would invest $320 million over the next ten years to turn Saudi coffee beans into a global product.

Kingdom Holding said in a stock exchange statement that the Public Investment Fund (PIF) will buy 625 million shares at 9.09 riyals ($2.42) each for a total of 5.68 billion riyals ($1.51 billion).

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The agreement’s share price was the same as the stock’s closing price on Thursday, which was the lowest in a year. In early trade on Sunday, it rose more than 6% to roughly 9.7 riyals.

alwaleed bin talal

The PIF, which oversees assets worth more than $600 billion, is at the heart of Saudi Arabia’s de facto ruler Crown Prince Mohammed bin Salman ambitious plan to diversify the economy away from oil.

In 2018, the crown prince ordered an anti-corruption effort against Prince Alwaleed. He was kept at the Ritz-Carlton in Riyadh for almost three months, together with a number of royals, top officials, and businessmen.

($1 = 3.7510 riyals)

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