Kingdom Holding Co. Secures 70% Ownership in Al-Hilal Club for SAR 840M

Kingdom Holding Co. Acquires Majority Stake in Al Hilal Saudi Club

In a significant move in the sports sector of Saudi Arabia, Kingdom Holding Co. (KHC) has signed an agreement with the Public Investment Fund (PIF) to purchase a 70% stake in Al Hilal Saudi Club for SAR 840 million. The club, which boasts a rich history dating back to its founding in 1957, is recognized as the most decorated football team in the Kingdom, making this acquisition notably strategic.

Transaction Details

The deal was executed based on an enterprise value of approximately SAR 1.4 billion, with an equity valuation of SAR 1.2 billion. The valuation encompasses 100% of Al Hilal Club’s equity. As indicated in a statement released on Tadawul, the SAR 840 million price tag represents KHC's investment for the acquired 70% stake.

KHC plans to finance the transaction using its internal resources, emphasizing a strong commitment to enhancing its sports portfolio.

Strategic Importance of the Acquisition

The acquisition aligns with Saudi Arabia's Vision 2030 objectives aimed at bolstering the nation’s position in the global sports arena. Al Hilal Club is not only well-regarded due to its impressive record and large fan base but also plays a pivotal role in shaping the sports landscape in the region. This move is expected to open up numerous commercial opportunities in the sports industry, enhancing the professional management of sports in the Kingdom.

Financial Insights and Future Projections

In recent financial data, Al Hilal Club reported revenues of SAR 413 million for the fiscal year ending June 30, 2023, with projected revenues of SAR 659 million and SAR 842 million for the following years, respectively. Such figures highlight the club's robust financial standing, which further validates KHC's investment decision.

Corporate Relations

It's important to note that the PIF holds a significant stake of 16.865% in Kingdom Holding Co., establishing it as a related party in this transaction. Abdulmajeed Alhagbani, a board member of KHC, also has an indirect interest due to his executive role at the PIF.

This acquisition marks a vital step for Kingdom Holding Co. towards cementing its influence in the evolving sports and entertainment sector in Saudi Arabia, contributing to the broader goals of modernization and economic diversification under Vision 2030.