Varun Anand discusses Brookfield Infrastructure Partners
Apollo Global Management Inc. and Global Infrastructure Partners are among suitors that bid for a roughly US$10 billion stake in Saudi Aramco’s oil pipelines, people familiar with the matter said.
Canada’s Brookfield Asset Management Inc., BlackRock Inc., sovereign wealth fund China Investment Corp. and Beijing-backed Silk Road Fund Co. have also made non-binding offers, the people said, asking not to be identified as the matter is private. Pension funds in Abu Dhabi and Saudi Arabia have separately submitted initial bids, the people said.
Aramco is studying the proposals before deciding which companies will be invited to make binding offers, the people said. Bidders may team up later in the process, the people said. Some prominent family-owned groups in Saudi Arabia are also considering partnering with other investors, according to the people.
The world’s largest oil company is mulling asset disposals as a way of maintaining its US$75 billion of annual dividend payments, almost all of which go to the Saudi government. That payout -- the biggest of any listed company in the world -- became harder to sustain after the coronavirus pandemic caused crude prices to plunge last year.
While prices have risen since November, that’s in large part because members of the OPEC+ cartel, including Saudi Arabia, have restricted production.
Dhahran-based Aramco is lining up a loan of about US$7.5 billion that will be offered to investors in the oil pipelines, people familiar with the matter said last month. The company hired New York-based investment bank Moelis & Co. last year to devise a strategy for selling stakes in some subsidiaries, Bloomberg News reported in December.
Representatives for Apollo, Aramco, BlackRock, Brookfield, CIC and GIP declined to comment. A spokesperson for the Silk Road Fund didn’t immediately respond to requests for comment.
The sale could be one of the largest infrastructure deals this year. Flush with record amounts of capital, infrastructure funds are seeking to invest in assets with predictable returns. A group of six investors including GIP and Brookfield bought a US$10.1 billion stake in the natural-gas pipelines of Abu Dhabi National Oil Co. last year.