Reuters

Saudi Arabia approved oil giant Saudi Aramco's massive initial public offering on Sunday, Bloomberg reported.

The company announced it plans to list shares on the local exchange in Riyadh.

The Tadawul All Share Index fell as much as 2.4% on the news.

Listing Saudi Aramco is a major part of the kingdom's economic plans going forward. Proceeds from the IPO will go to the sovereign wealth fund.

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Oil giant Saudi Aramco announced Sunday that it will list shares of its massive initial public offering, likely starting in December, on the local exchange in Riyadh, Bloomberg reported.

It's the official kickoff of what could be the world's largest initial public offering. Saudi Arabia is reportedly targeting a valuation between $1.5 trillion to $2 trillion for Aramco, the most profitable company in the world.

The Tadawul All Share Index fell as much as 2.4% on the news. While investors have been anticipating Aramco's IPO for weeks, the announcement confirmed that shares of the company will soon be available to trade on local markets. In anticipation, investors are selling other Saudi stocks.

Aramco's valuation will ultimately be determined during the investor roadshow, when the company will look to secure investors for the initial public offering, Aramco Chairman Yasir Al-Rumayyan said during a press conference in Dharan, Bloomberg reported.

Al-Rumayyan went on to say that the percentage of local versus international investors is yet to be determined. Earlier in the week, Reuters reported that the company planned to float to float 1% to 2% of its stake in the Tawadul market in Saudi Arabia, citing unnamed sources familiar with the matter. That amount of float could be worth roughly $20 billion, according to the report.

In addition, the company will release a prospectus on November 9, Chief Executive Officer Amin Nasser confirmed at the same conference, according to Bloomberg. The announcement comes just three weeks after Aramco initially delayed the process to secure more investors, and three years after Crown Prince Mohammed bin Salman proposed the idea of the oil giant going public.

Making Aramco public is a key part of the kingdom's plan to end its dependence on oil — the proceeds from the massive IPO would go to the country's sovereign wealth fund, which has investments managed by SoftBank and Blackstone, Bloomberg reported.

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