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Goldman Sachs hopes Aramco deal in Saudi Arabia can help it recover from 1MDB fallout
- After missing out on at least US$25 billion in deals in Abu Dhabi, the bank is well-placed for the world’s biggest initial public offering from Aramco
- The deal could open the door to more lucrative mandates as Saudi Arabia opens up to foreign investment and plans to privatise state assets
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Goldman Sachs is tapping its upper echelons to navigate a notoriously complicated region where it has stumbled of late: the Middle East.
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After missing out on at least US$25 billion in deals in Abu Dhabi – the emirate that snubbed the US bank for its involvement in the 1MDB scandal – Goldman Sachs is making a push into Saudi Arabia.
Chief executive officer David Solomon – the first chief of a Wall Street bank to visit the kingdom following the murder of government critic Jamal Khashoggi – has turned to international banking head Richard Gnodde and former Donald Trump adviser Dina Powell to help lead the push. They’ve all spent months wooing top officials in Riyadh, vying for a slice of the world’s biggest initial public offering, people with knowledge of the matter said.
The charm offensive is paying off: the bank is considered one of the strongest contenders to get a lead role on Saudi Aramco’s mammoth offering. The deal promises to open the door to more lucrative mandates as the nation opens up to foreign investment and plans to privatise hundreds of state assets.
Saudi Arabia is becoming the focus of Goldman Sachs’ Middle East strategy after the fallout from the 1MDB corruption scandal marked its abrupt downfall in Abu Dhabi, once one of its most lucrative markets in the region. Dealings with Qatar have become more complicated amid its diplomatic clashes with the kingdom. Global banks, including JPMorgan and Credit Suisse, are investing in Saudi Arabia as it promises some of the world’s biggest deals.
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