Saudi Arabia is weighing its options in listing its state-owned Saudi Arabian Oil Co. on either the New York or London stock exchanges. There remains considerable debate within Saudi Arabia on where the country will place 5 percent of Saudi Aramco for sale in an initial public offering (IPO). Saudi Aramco’s advisers were pushing for London, but Crown Prince Mohammed bin Salman — who chairs the Supreme Council for Saudi Aramco and will make the final decision— has been in favor of listing in New York. Saudi Aramco’s IPO is one of the most complicated in recent memory, but it is critical to get right because it sits at the center of the economic reform plan Vision 2030.
There are strengths and weaknesses to listing in London and New York. Saudi Aramco has been lobbying for London because of concerns about the laws and disclosure rules in the United States. Saudi Aramco is apprehensive about the U.S. Securities and Exchange Commission’s (SEC) rules on company reserves, as well as about U.S. legal cases under the Justice Against Sponsors of Terrorism Act. But the United States also offers deep capital markets to draw upon, and perhaps more important for the crown prince, the U.S. listing would provide…