Overview of Saudi Arabia’s Drive Toward Privatization

Saudi Arabia’s push toward privatization is a key component of the government’s ambitious Vision 2030 economic and social reform program, and necessary for the Kingdom’s goals of diversifying its economy away from petroleum revenue dependency.

The news service Reuters provides a “factbox” list of Saudi Arabia’s sectors that are making progress toward privatization, and encouraging greater participation from private businesses in the Saudi economy. The Kingdom “has said it aims to raise around $200 billion in the next several years through privatization programs in 16 sectors ranging from oil to healthcare, education, airports and grain milling,” Reuters notes.

[Click here to see the Reuters breakdown]

All of this is happening despite the prospect of low fees and an uncertain regulatory environment. According to another Reuters report, KKR is among the U.S.-based PE firms joining regional companies such as Abu Dhabi’s Gulf Capital in the search for opportunities from the government’s plan to sell off around $200 billion in assets on top of a stake in oil giant Saudi Aramco. On top of that, banks are also beefing up their operations.

The marquee example of Saudi Arabia’s privatization drive is what is being dubbed as the “sale of the century,” the listing of a percentage of state oil giant Saudi Aramco, which will ultimately value the company between $1 trillion and $2 trillion.

As President Trump arrives in Riyadh this weekend, American companies are in tow, hoping to capitalize on the opportunities for investment and business deals.

In the defense sector, the White House is hoping that up to $100 billion in arms deals will be finalized during the visit, cementing the U.S.-Saudi security partnership for years to come.