PIF's Sale of Al-Hilal to Kingdom Holding

On 1 September, Kingdom Holding Company completed its purchase of a 70% stake in Al-Hilal from Saudi Arabia's Public Investment Fund for SAR 840 million, around $224 million. It is the first time PIF has sold control of one of the Saudi Pro League clubs it took over in 2023.

In 2023, PIF took 75% stakes in the four biggest clubs in Saudi Arabia, Al-Hilal, Al-Nassr, Al-Ittihad and Al-Ahli, as part of a government plan to privatise the country's sports clubs. The other 25% of each club stayed with its non-profit foundation. PIF then paid for the signings that brought big international players to the league. The plan was always to bring in private investors once the clubs had grown in value.

Before the sale, the Ministry of Sport moved the 25% held by Al-Hilal's foundation to PIF, so the fund owned all of the club. PIF then agreed to sell 70% to Kingdom Holding, signing a binding sale agreement in April. The deal valued the whole club at SAR 1.4 billion, but once the club's debt was taken into account the value of its shares was around SAR 1.2 billion, which is why 70% cost SAR 840 million. PIF kept the other 30%.

The deal also needed approval from Saudi Arabia's competition authority before it could complete. AS&H Clifford Chance advised PIF and Latham & Watkins advised Kingdom Holding, and the transaction was described as one of the first private acquisitions of its kind in Saudi Arabia.

The most notable feature of the deal is that the club has not fully moved into private hands. Kingdom Holding is controlled by Prince Alwaleed bin Talal, but PIF also owns 16.9% of Kingdom Holding. This means that as well as its direct 30% stake, PIF still has an indirect interest in Al-Hilal through the buyer.

The sale is likely to be the model for Al-Nassr, Al-Ittihad and Al-Ahli: clubs built up with state money, then sold to private investors while the state keeps an interest.