Saudi Bourse Plans to Dial Up M&A Amid Capital-Markets Push

By Pune Media On Nov 5, 2024 13

(Bloomberg) — Saudi Arabia’s stock exchange operator is eying mergers and acquisitions as a means to broaden the kingdom’s capital markets amid a flood of local offerings, a senior official said.

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“M&A will play more of a role in our future than it has done in our past,” Lee Hodgkinson, chief strategy officer at Saudi Tadawul Group Holding Co., said in an interview in London. The company will aim for “digestible” and “strategically relevant acquisitions,” he said, without providing details of any potential targets.

Saudi Arabia has seen numerous companies coming to its Tadawul stock exchange in recent years. As part of Crown Prince Mohammed bin Salman’s Vision 2030 plan, the country is seeking to build out its markets and diversify the economy away from oil.

So far this year, $15.6 billion has been raised through stock sales on the bourse, including a mammoth offering from oil major Saudi Aramco, according to data compiled by Bloomberg.

Hodgkinson didn’t rule out bolting on other stock exchanges in the future, but said the group’s current focus is on diversifying its revenue mix.

Earlier this year, Tadawul acquired a stake in the owner of the Dubai Mercantile Exchange for $28.5 million in a bid to grow into the commodities space.

According to Hodgkinson, the group is looking into introducing a number of post-trade services around stock lending and collateral management, and is also exploring data services such as indices.

When considering acquisition targets, the group will “exercise a great deal of discipline” on valuation and potential synergies, Hodgkinson said. M&A is intended to support the group’s organic growth strategy, he added.