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The London Stock Exchange’s chief executive is accompanying UK prime minister Theresa May on her trip to Saudi Arabia to lobby for the LSE to host the international component of the planned initial public offering of state oil giant Saudi Aramco.

Xavier Rolet, LSE chief executive, is one of the few private sector representatives joining Mrs May’s delegation as she seeks to build on security and trade ties with one of the UK’s strongest Middle Eastern allies, people aware of the matter say.

Mr Rolet, who will attend a finance roundtable at the Saudi stock exchange on Tuesday, is also expected to sit in on Mrs May’s meeting with Khalid al-Falih, the Saudi oil minister and chairman of Saudi Aramco.

Mr Falih plays a pivotal role in the kingdom’s economy, representing the world’s largest oil exporter internationally, but also liaising between Saudi Aramco and the government on the IPO.

Such high-level government support for the LSE’s lobbying effort reflects the importance of the Saudi Aramco initial public offering, which is expected to be the world’s largest initial public offering of all time.

Securing the IPO would be a major victory for the UK given the uncertainty created by the Brexit vote.

The kingdom is planning to sell five per cent of the world’s largest oil-producing company in a planned late 2018 offering.

The Aramco IPO is the centrepiece of the kingdom’s ambitious economic reform plans that aim to end reliance on the volatile oil sector by kick starting private sector development.
International stock exchanges are scrambling to get a slice of the huge flotation, with New York and London battling to be the lead international listing venue, alongside a domestic offering on Tadawul, the Saudi bourse.

While the prestige and sheer size of New York’s investor pool makes it the favourite, people with knowledge of the situation indicate the listing requirements in London might be more accommodating.

While Saudi officials value Saudi Aramco at $2tn, it may only reach around half
that target. Nevertheless it would still raise more money than any other IPO.

Asia, which is considered a key part of Saudi Arabia and its state energy company’s growth strategy, cannot be ruled out especially if Saudi Aramco lists on more than two exchanges as officials have suggested.

- Additional reporting by Phil Stafford and David Sheppard

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