Reuters: Al-Sulaiman Group considers IPO of its IKEA franchise

Two sources said that the Saudi Al-Sulaiman Group is considering an initial public offering of its Ikea franchise next year, and that it has hired Mollis & Co. as an advisor for the process.

According to “Reuters”, the two sources, who requested anonymity because the matter is not public, stated that the Al-Sulaiman Group plans to invite investment banks early next year to apply for roles in a possible public offering of shares.

They added that the deliberations are still at an early stage, and it was not immediately clear how much the company intends to put up in shares or raise money in the deal.

IKEA entered Saudi Arabia in 1983 through the family-owned Al Sulaiman Group, which owns and operates the Swedish furniture maker’s franchise in Saudi Arabia and Bahrain.

Saudi Arabia is encouraging more family-owned companies to list in a bid to boost capital markets as part of reforms aimed at reducing the kingdom’s dependence on oil revenues.

The kingdom has seen a surge in IPOs since oil giant Aramco listed in a record $29.4 billion listing in 2019.

The Gulf region is experiencing a boom in IPOs as well, with issuers raising more than $15 billion in IPOs this year, according to Refinitiv data.

The data showed that the region’s IPO yields in the first half of the year outpaced their European peers, even as global markets continued to be volatile due to Russia’s invasion of Ukraine.