Only one country in the world is named after the dominant dynasty. This is Saudi Arabia and the clan it pays so much tribute to is the Saud. For decades, the petrostate has lived in a kind of nirvana, thanks to the narcotic rain of millions of dollars provided by the vast oil reserves on which it rests. This complacency that free money conveyed degenerated into a past-entrenched regime with high levels of corruption and bureaucracy. While its Gulf neighbors (not always friends) such as Kuwait, Qatar, the United Arab Emirates and Bahrain diversified their economies to reduce their dependence on fossil fuels, Riyadh did not budge. But in 2015 everything changed. That year, Salman bin Abdulaziz ascended to the Saudi throne and shortly thereafter handed over leadership of the desert kingdom to his son and crown prince.
Mohamed bin Salman, the real power of the current House of Saud, has brought about few social changes in a regime that perpetuates inequalities, applies limitless repression of dissent, marginalizes women and homosexuals and maintains an ultra-Orthodox religious vision. On the other hand, the economic vision of this technology-loving man in his mid-thirties meant a revolution. Supported by a roadmap called Vision 2030, he wants to use the country's petrodollars to acquire shares in Western companies. A double bet: on the one hand, it eliminates the risk that all the eggs are in one basket, called raw; on the other hand, launder the regime's image with a new monetary diplomacy. Due to the amount of resources under management and the country's poor reputation, any investments made attract a lot of financial and political attention.
In recent months, Saudi Arabia has accelerated its maneuvers to expand its influence over European strategic assets, in a significant change of direction since the kingdom has always had a bias towards the United States. These are some of the most noticeable movements.
- The attack on Heathrow. Bin Salmán wants to make Saudi Arabia a world-class tourist destination. What better way to achieve this than by having access to one of the busiest airports in the world? At the end of November last year, the Saudi sovereign wealth fund – The Public Investment Fund (PIF) – bought 10% of Heathrow Airport from Ferrovial (the other 15%, owned by the Del Pino family business, was retained by the fund). French venture capital Ardian). The €2.7 billion joint operation comes at a time of recovery in global aviation following the impact of the pandemic. PIF will not be the only petro-state in the capital London, where Qatar's sovereign wealth fund is already based alongside Singapore's investment vehicle.
- Turmoil at Telefónica. Telecommunications is another area that the Crown Prince has his eye on. The world is dependent on mobile devices and telecommunications companies have access to sensitive data and infrastructure, often related to defense issues. With this philosophy, the Saudi state-owned company STC achieved a coup last September: it reported to the market the acquisition of 4.9% of Telefónica's capital, with the possibility of increasing the stake by a further 5% through the conclusion of financial derivatives. The operation, worth 2,000 million, attracted great political attention, but the Spanish government's hands were tied in office at the time. After the investment process was completed, the management's reaction was not long in coming: they ordered that SEPI acquire up to 10% of Telefónica in order to become the first shareholder.
- In the wake of James Bond. The desert kingdom wants to build its own automobile industry on the west coast of the country. Under this premise, the movements of their sovereign wealth fund are following the example of the major Western manufacturers. PIF owns a 21% stake in British luxury car maker Aston Martin, known worldwide as the sports car of world-famous Agent 007. It also controls 60% of the shares of the American electric vehicle manufacturer Lucid Group.
- Billionaire goals. Football is the king of sports and a perfect form of marketing for a regime seeking foreign recognition. FIFA has already confirmed that Riyadh will host the 2034 World Cup and the Saudis have spent billions to attract famous footballers such as Cristiano Ronaldo, Neymar and Benzema, among others, to their league. As part of this bet for the ball, PIF bought Newcastle. The operation, which took place in 2021, valued the famous English club at more than 300 million euros.
- A watchtower from the towers. In 2022, a consortium consisting of PIF, KKR and Global Infrastructure Partners agreed with Vodafone to acquire Vantage Towers, its telecommunications tower business. This sector is also strategically important and very sensitive for Western governments.
- A foot in decarbonization. Saudi Arabia bases its wealth on fossil fuels, but is also thinking about a future without hydrocarbons. That is why it was of great importance when former British Prime Minister Boris Johnson announced in 2021 the decision of the chemical company Saudi Basic Industries Corporation, part of the state oil company Saudi Aramco, to invest 1 billion euros in its plant in Teesside, northeast of the United Kingdom Kingdom to develop new technologies that make it possible to reduce pollutant emissions.
A big fiasco called Credit Suisse
In the fall of 2022, the Saudi National Bank (SNB) thought it was a safe bet to invest money in a century-old company like Credit Suisse. That's why it contributed 1.4 billion francs to the Swiss bank's capital increase. A few months later, in March 2023, the house of cards finally collapsed. And part of the trigger was the SNB itself. The crisis in regional banks in the United States led to investors targeting the weakest companies. When the president of the Saudi company was asked if he could have more money with Credit Suisse, he flatly denied it. A few weeks later, UBS took over the competitor at a bargain price.
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