Saudi Arabia’s PIF to acquire 54% stake in MBC Group

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is set to acquire a 54 per cent stake in MBC Group from the finance ministry, represented by Istedamah Holding, for $2bn (SAR7.5bn).

MBC said in a bourse filing that Istedamah would transfer the entirety of its stake to PIF, amounting to 179.6 million shares at SAR41.60 apiece, subject to certain approvals and non-objections that may be required from relevant entities.

The deal follows a flurry of activity for MBC, which debuted on the Saudi Exchange earlier this year after it raised $222m in an initial public offering for 10 per cent of the business. The broadcaster sold a 4.9 per cent stake in its advertising subsidiary Arabian Contracting Services for SAR417m and paid off a loan of almost SAR500m to Istedamah Holding.

MBC also acquired a nearly 14 per cent stake in the music streaming platform Anghami through its MBC Ventures in May.

Meanwhile, the PIF is responsible for driving many of Saudi Arabia’s economic diversification projects under Prime Minister and Crown Prince Mohammed bin Salman’s Vision 2030 agenda.

Since 2017, the $925bn sovereign fund has created 95 new companies and over 644,000 direct and indirect jobs. PIF seeks to foster growth in various promising sectors and boost local content by forming strategic partnerships with the private sector. The fund plans to inject a minimum of SAR150bn annually into the local economy.

The state investor swung to a profit of $36.81bn (SAR138.1bn) in 2023, while its total revenues more than doubled to $88.3bn from $44bn a year earlier.

With a portfolio of investments ranging from date farms to multinational conglomerates, PIF’s sources of funding include retained earnings from investments, capital injections from the government, government assets transferred to the fund, and loans and debt instruments.

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